Space startups welcome GST exemption for satellite launch services

The Indian private sector on Wednesday welcomed the government's decision to exempt satellite launch services by private organisations from GST, saying the move will help them offer competitive rates to put satellites in orbit.

The GST Council, at a meeting on Tuesday, 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.

The Indian Space Association-EY report had said that the space launch segment was expected to grow rapidly by 2025 at the rate of 13 percent per annum.

"This step will give financial relief to the players and will incentivise growth of this nascent sector. We believe it will help enable the growth of indigenous launch capabilities and ensure a level playing field for all," Lt Gen A K Bhatt (retd.) Director General, Indian Space Association (ISpA) said.

He said the satellite launch segment has become a key focus area for Indian startups and SMEs, driving innovation and seeking new revenue opportunities.

"As of now, GST exemption is for government launches through NSIL. This GST exemption extending to private players is a welcome move which will create a level playing field and also encourage Indian satellite companies to opt for launch services from domestic private companies," Pawan Kumar Chandana, co-founder and Chief Executive Officer of Skyroot Aerospace told PTI.

Last year, Skyroot became India's first private company to launch a rocket into space. It plans to launch the Vikram-1 rocket into orbit later this year and launch commercial operations next year.

EtherealX Tech, which is developing the world's most powerful medium-lift partially reusable launch vehicle, also welcomed the decision of the GST Council.

"We welcome the decision of the government. It will help the private players offer competitive rates in a highly competitive sector," Manu J Nair, co-founder, EtherealX told PTI. The Bengaluru-based start-up, founded last year, is aiming to have its first launch by 2027.

"The decision of the GST Council for the extension of the GST exemption on satellite launch services is a welcome move.

"We appreciate the government's recognition of the importance of a level playing field for the private sector and startups in the space industry," Anil Prakash, Director General, SatCom India Association, told PTI.

He said SIA-India had also suggested a liberalised FDI Policy, the inclusion of the space sector in Performance Linked Incentive and defence offsets.