Govt exempts Satellite launches from GST to promote domestic launch

The ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL) satellite launch services will not be subject to the GST Council's decision.

The Union government exempted companies providing satellite launch services from the goods and services tax (GST) on Tuesday, July 11, giving the Indian spacetech ecosystem a significant boost.

Following the recommendations of the GST Council's 50th meeting, the statement was made by Finance Minister Nirmala Sitharaman. The action has specifically been taken to support nascent firms in the expanding spacetech industry.

The ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL) satellite launch services will not be subject to the GST Council's decision. To support new businesses, this tax exemption might also apply to services offered by private sector entities.

According to an official press release, "It has been decided that the GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL) may be extended to such services supplied by organisations in the private sector as well to encourage startups."

It remained unclear, though, whether other facets of the spacetech ecosystem, such production and satellite operation, would also be immune from the tax levy.

The GST exemption on satellites will further safeguard the local satellite industry, offer it a level playing field, and allow it to utilize domestic launch capabilities without an upfront GST penalty. They haven't, however, made any mention of private launch firms like Sky Root. If that is the case , if a particular relief is not provided to private launch businesses, it goes against the concept of equal opportunity.

This occurs just a week after Jitendra Singh, the Minister of State (MoS) for Science and Technology, referred to the private sector's participation as crucial to the nation's space economy. Additionally, he claimed that due to liberalised space policies, there are now 140 spacetech businesses operating in the nation.

Lt. Gen. AK Bhatt (retd.), Director General, Indian Space Association (ISpA) said: "We welcome the decision of Hon'ble Finance Minister Nirmala Sitharaman to exempt GST on satellite launch services by private organizations. This step will give a financial relief to the players and will incentivise growth of this nascent sector. This was one of our pre-budget recommendations and we believe  it will help enable the growth of indigenous launch capabilities and ensure a level playing field for all.

The satellite launch segment has become a key focus area for Indian startups and SMEs, driving innovation and seeking new revenue opportunities. According to the ISpA-EY report, the space launch segment is expected to grow rapidly by 2025, with a CAGR of 13%, which will be fueled by increased private participation, advanced technology adoption, and cost-effective launch services."