Budget 2024: Will Space tech industry get GST relief on satellites and launch vehicles?

Finance Minister Nirmala Sitharaman is set to present the fourth paperless budget on February 1 for the financial year 2024-25.

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With just a couple of days left for the Interim Budget 2024, the space tech industry in India urges the government for GST relief on satellites and launch vehicles. They believe this will help boost the sector and make it more globally competitive.

According to the sources, currently, only satellite launch services provided by ISRO, Antrix Corporation, New Space India Limited, and startups in the space sector are exempt from GST. The Indian Space Association (ISpA), which represents over 39 space tech startups and major companies, is asking for this exemption to be extended to satellites, launch vehicles, and ground equipment manufacturing as well.

The industry argues that this would reduce the cost of doing business in the space sector, which is still in its early stages of development in India. They also believe that it would help attract more investment into the sector and create jobs.

The government is yet to announce its decision on the ISpA's request. However, it is likely to consider the industry's concerns as it looks to boost the growth of the space sector.

According to the people who are known with the subject, here are some of the potential benefits of GST relief for the space tech industry in India:

Reduced costs:

GST exemption would reduce the overall cost of manufacturing and launching satellites and launch vehicles. This would make Indian companies more competitive in the global market.

Increased investment:

Lower costs could attract more investment into the space sector, which would help it to grow and develop more quickly.

Job creation:

A growing space sector would create more jobs in India, both in manufacturing and in related industries such as IT and telecom.

It is important to note that there are also some potential drawbacks to GST relief for the space tech industry. For example, it could lead to a loss of government revenue. Additionally, it is important to ensure that any tax breaks are targeted effectively and do not simply benefit large, established companies.

Overall, GST relief could be a positive step for the space tech industry in India. However, it is important to weigh the potential benefits and drawbacks carefully before making a decision.