As part of the Rs 20 lakh crore economic stimulus package announced by the government to supposedly boost a COVID-19-impacted economy, the Finance Minister (FM) declared that all sectors of the economy would henceforth be open for the private sector, and that public sector undertakings (PSUs) would work mainly in strategic sectors and be privatised in others. One of the areas thrown open to the private sector was space.
Keeping above in mind the GST Council in its 42nd Meeting held on October,5 had inter alia decided that in order to encourage domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and New Space India Limited (NSIL) would be exempted.
It may be noted here that supply of services which are exempted from levy of GST are provided under Notification No. 12/2017- Central Tax (Rate) the 28th June, 2017. In line with above decision of the GST Council, the Central Government has issued Notification No. 05/2020 – Central Tax (Rate) dated 16th October,2020.
The notification seeks to amend Notification No. 12/2017- Central Tax (Rate) the 28th June, 2017 whereby in said notification a new serial number 19C is added in order to exempt Satellite launch services supplied by Indian Space Research Organisation, Antrix Corporation Limited or New Space India Limited.
It may be noted here that before this amendment 18% GST was applicable on the Satellite launch services due to which Indian firms were coerced to force the Indian satellite-builders to launch their satellites from foreign soil using foreign rockets.
The GST exemption now provided will help protect the native satellite industry utilise homegrown launch capabilities without the GST burden and restore a level-playing field.
The Government with the objective to encourage domestic launching of Satellites by ISRO and Antrix Corporation (ISRO’s commercial arm), GST Council has decided that 18% GST will completely be scrapped. The startups that are manufacturing satellites will be exempted from GST now when they choose Indian launch vehicle.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
