Indian private space ecosystem welcome GST exemption for satellite launches

The private space ecosystem are lauding the government's decision to exempt startups and others from paying GST on satellite launches

The private space industry comprising of startups, industry bodies representing such startups and bigger companies are lauding the government's decision to exempt Goods and Service Tax on satellite launches by private players.

This comes at a time when the Indian space tech startup ecosystem has been making multiple launches, including that of satellites and launch vehicles.

"It has been decided that 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 also to encourage start-ups," a PIB release said after the conclusion of the 50th meeting of the GST Council on July 11.

Welcoming the decision, Indian Space Association (ISpA) which represents 32 start-ups including, Skyroot Aerospace, Digantara, Pixxel, and Agnikul apart from bigger players such as Bharti Airtel, L&T, and OneWeb, among others, said that the move will provide financial relief to the sector.

"This step will give financial relief to the players and will incentivise the growth of this nascent sector. This was one of our pre-budget recommendations. We believe it will help enable the growth of indigenous launch capabilities and ensure a level playing field for all," Lt Gen (retd) AK Bhatt, director general of ISpA said.

Attributing to a recent report by ISpA and Ernst & Young (EY), Bhatt said that the space launch segment is expected to proliferate by 2025, with a CAGR of 13 per cent.

"Currently GST is exempted for launches through NewSpace India Limited (the commercial arm of ISRO) making it convenient for satellite customers to launch through NSIL. This exemption extended to private players is a welcoming move which will create a level playing field and also encourage Indian satellite companies to opt for launch services from domestic private companies," Skyroot Aerospace CEO Pawan Kumar Chandana told Moneycontrol.

Anirudh Sharma, CEO of Bengaluru-based space tech startup Digantara said that this will remove a crucial cost burden and it will provide a fair chance for startups to compete on the global stage.

"By eliminating this tax barrier, Government has demonstrated its commitment to fostering innovation and growth within the space tech sector. As a company actively deploying satellites to orbit, we are encouraged to see such progressive steps taken by the Government," Sharma said.

The move has also been welcomed by venture capitalists such as Merak Ventures, which focuses on investments in the deep tech segment.

"It's an exciting shift that will not only boost competitiveness, and affordability but also generate demand across sectors from agriculture to healthcare. Such forward-looking decisions foster a fertile landscape for startups to thrive, draw global players into partnerships, and propel India towards leadership in the global space tech arena," Sheetal Bahl, Partner, Merak and growX ventures said.