Will GST Reforms Significantly Enhance Our Defense Corridors? Gen Upendra Dwivedi
Click to start listening
Synopsis
General Upendra Dwivedi highlights the transformative impact of recent GST reforms on India's defense corridors. With significant reductions and eliminations in GST for various military assets, investment opportunities are set to surge, benefitting MSMEs and startups in the defense sector. This shift promises to bolster national security and innovation in military technology.
Key Takeaways
- GST elimination on multiple military equipment enhances funding opportunities.
- Drone GST drastically reduced from 28% to 5%.
- Increased investments expected in defense corridors.
- MSMEs and startups gain easier access to research and development funds.
- Significant military assets now under nil GST.
New Delhi, Sep 5 (NationPress) Chief of the Army Staff, General Upendra Dwivedi, remarked on Friday that the recent GST reforms are set to significantly elevate our defense corridors, enabling us to make substantial investments and anticipate improved outcomes.
In a significant enhancement for the defense sector, the Goods and Services Tax (GST) has been entirely removed on several weapons, military aircraft, and essential equipment.
Furthermore, the GST on drones has been remarkably reduced from 28% to 5%.
Speaking at an event, Dwivedi expressed gratitude towards the government for these GST reforms.
"The most significant advantage is that our defense corridors will experience a tremendous boost, allowing us to invest more and expect double the results. Likewise, MSMEs and startups, which often struggle with funding, will find it simpler to invest in research, development, manufacturing, and upgrading equipment for the Indian Army," he stated.
Under the GST 2.0 framework, several weapons that previously fell under the 18% GST bracket have now transitioned to the nil GST category.
These include military transport aircraft like the C-130 (acquired from the US) and the C-295 medium transport aircraft (jointly produced by Airbus and Tata in Vadodara).
Moreover, GST has been abolished on missiles launched from Remote Pilot Aircraft (RPAs) utilized by the armed forces.
GST has also been eliminated on GSAT systems, ship-launched missiles, flight motion simulators, underwater vessels, and fighter jet ejection seats, which ensure pilots can exit safely in emergencies.
vd
Point of View
I believe that the recent GST reforms are a vital step toward enhancing India's defense capabilities. These changes will not only improve investment opportunities but also empower MSMEs and startups, fostering innovation in military technology. The government’s proactive approach in this sector is commendable and reflects a commitment to national security.
NationPress
05/09/2025
Frequently Asked Questions
What are the key benefits of the GST reforms for the defense sector?
The GST reforms will eliminate taxes on many military items and drastically reduce drone taxes, allowing for greater investment in the defense sector and encouraging innovation among MSMEs and startups.
How will these reforms impact MSMEs and startups?
MSMEs and startups will find it easier to secure funding for research and development, manufacturing, and upgrading military equipment, thereby boosting the overall defense ecosystem.
Which military assets are affected by the GST changes?
The reforms affect various military assets, including transport aircraft like the C-130 and C-295, drones, missiles, and essential military technology, which will now have reduced or eliminated GST.
