NEW DELHI: The slash in GST for drones by fixing it at a uniform 5 percent in the 56th GST Council meet is set to boost the country's rapidly growing drone ecosystem.
The GST exemption given for flight simulators and motion simulators, critical for pilot training, will offer a fillip to training, said an official release from the Civil Aviation Ministry.
Earlier, the GST rate was 18% for drones with integrated cameras and 28% for drones classified for personal use. Under the new reforms, a uniform GST of 5% has been introduced for all drones, regardless of whether the camera is integrated or separate and irrespective of whether they are used for commercial or personal purposes.
Civil Aviation Minister Ram Mohan Naidu, lauded the reforms, saying, “The GST rate rationalisation with a simplified two-slab structure of 5% and 18% is the biggest reform in India’s indirect taxation ever. "
Stating that it would be a big boon for the consumers and at the same time a big boost for the Indian manufacturers, he said it would also enable India to emerge as a leader in transformative technologies like drones.
"A uniform 5% GST will now apply on all drones, providing significant policy certainty and eliminating classification disputes. Furthermore, flight simulators and motion simulators which are critical for pilot training have also been exempted from GST. I believe it will encourage the training ecosystem in the country, helping airlines and academies reduce expenditure on training equipment.”
Greater clarity for manufacturers and lower costs for users will boost drone adoption, especially in sectors like agriculture (crop monitoring, pesticide spraying), petroleum and mining (pipeline and asset inspection), infrastructure (surveying and mapping), logistics (last-mile delivery) and defense/security (surveillance and rapid response), the release said.
"Affordable and accessible drones will advance India’s goals under Make in India and Atmanirbhar Bharat, while enhancing the efficiency of multiple industries and public services," it added.
The rationalised GST rate is also expected to generate employment opportunities in drone manufacturing, assembling, software development, data analytics and field operations, the Ministry said.