Lok Sabha Question No. 2146 (UNSTARRED), answered on 2024-08-05
Subject: GST Exemption for Space Industry
Ministry: FINANCE
Asked by: Shri Dhairyasheel Sambhajirao Mane, Shri Sudheer Gupta, Shri Chavan Vasantrao Balwantrao

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF REVENUE LOK SABHA UNSTARRED QUESTION NO.2146

## TO BE ANSWERED ON MONDAY, AUGUST 5, 2024

## GST EXEMPTION FOR SPACE INDUSTRY

## 2146.   SHRI CHAVAN VASANTRAO BALWANTRAO: SHRI DHAIRYASHEEL SAMBHAJIRAO MANE: SHRI SUDHEER GUPTA:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  Space  industry  has  demanded  GST  exemption  for  components  of  Launch Vehicles, Productivity Linked Incentives (PLI) and more funds from the Government;
- (b) if so, the details thereof along with the response of the Government in this regard;
- (c)  whether  Indian  Space  Association  (ISpA)  and  Satcom  Industry  Association,  industry  27 bodies, have sought greater Government expenditure on the space sector in the form of an anchor customer for the nascent private sector;
- (d) if so, the details thereof along with the reaction of the Government thereto; and
- (e) the other financial exemptions provided by the Government to the space industry?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (d):  As part of the Pre-Budget proposals, few associations have  sought  GST exemption for  private  satellite  launch  service  providers,  productivity  linked  incentive  (PLI)  schemes  and additional funds for the space industry.

With  regard  to  GST,  it  is  to  state  that  the  GST  rates  and  exemptions  are  based  on  the recommendation of the GST Council which is a constitutional body comprising of representatives of the Union and State/UT governments.  Based on the recommendation of the GST  Council  in  its  50 th meeting,  with  effect  from  27.07.2023,  all  satellite  launch  services including  private  satellite  launch  services  have  already  been  fully  exempted  from  GST Notification No.  07/2023 Integrated Tax (Rate) dated 26th July, 2023.

As regards allocation of additional funds, after considering pre budget suggestions, the regular Budget 2024-25 has been presented in the Parliament on 23.07.2024. The Budget allocation for the Department of Space from 2020-21 onwards is as below:

| Department of Space   |   Allocation (in Rs. Crore) |
|-----------------------|-----------------------------|
| BE 2024-25            |                    13042.8  |
| RE 2023-24            |                    11070.1  |
| 2022-23 (Actuals)     |                    10139.4  |
| 2021-22 (Actuals)     |                    12473.8  |
| 2020-21 (Actuals)     |                     9474.41 |

As regards the demand for PLI Scheme for the Space Industry, in place of Production-Linked Scheme, the government is   considering introducing Investment Incentive Scheme for the space sector  /  sub  sector  to  incentivize  domestic  space  start-ups  and  space  industry.  The  Space Commission  in  its  152nd  meeting  has  deliberated     the  proposal  at  length  and  gave  an  inprinciple approval for an outlay   of Rs. 600 Cr. towards the Investment Incentive Scheme for setting up  of a greenfield manufacturing facility for manufacturing of notified  space products, systems and components subject to some conditions and  approval.

Various  schemes  to  encourage  and  hand  hold  private  sector  have  also  been   announced  and implemented  by  IN-SPACe,  i.e.,  Seed  Fund  Scheme,  Pricing   Support  Policy,  Mentorship support,  Design  Lab  for  non-government  entities,  Skill   Development  in  Space  Sector,  ISRO facility utilization support,  Technology Transfer to non-government entities.

- (e) : The other exemptions /concessions provided to the space industry  are as follows:
- (i) Full  exemption  from  basic  customs  duty  and  Integrated  GST  has  been  provided  to satellites  and  payloads,  and the  ground  equipment for the testing of such satellites and payloads.
- (ii) A concessional basic customs duty rate of 5%  and a concessional  GST rate of 5% has been provided to scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mock ups and modules, raw material and consumables required for launch vehicles and satellites and payloads.

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