GST revamp for drones: Sector set for progress; commercial UAVs ready for take-off with simpler tax structure

BENGALURU: In a transfer to decrease prices and take away longstanding ambiguities, the GST Council simplified the tax structure for unmanned aerial automobiles (UAVs). Commercial drones now entice 5% GST, whereas navy drones, flight movement simulators, high-performance batteries and communication tools, corresponding to software-defined radios have been totally exempted. At the identical time, GST on plane for private use was raised from 28% to 40%.Industry executives stated the choice recognises drones as each an financial alternative and a strategic necessity and is predicted to speed up adoption throughout agriculture, logistics, surveillance, and defence.“Earlier, the lack of clarity on whether drones with cameras attracted 5%, 18%, or even 28% GST often led to disputes and compliance risks,” stated Smit Shah, president of the Drone Federation of India. “The new structure removes harassment, eliminates cost arbitrage between firms, and levels the field. With revenues of around Rs 2,500 crore in FY25 and about $500 million invested in over 600 startups, the sector is positioned for sharper growth.”For operators like Garuda Aerospace, the rationalisation immediately impacts pricing and recurring revenues. “Since Garuda recently entered defence sales, the 0% GST is very welcome. But more important is batteries, main consumable for agri drones, are now exempt. We have our own BIScertified battery unit, and this allows us to pass on cost benefits to customers, while strengthening profitability,” stated founder and CEO Agnishwar Jayaprakash.“The long-term impact will enable manufacturers to develop cutting-edge technology, expand defence contracts, and deliver cost-effective drones,” stated Ankit Mehta, co-founder and CEO of listed participant thoughtForge.