How Will GST Reforms Propel Our Defence Corridors? Gen Upendra Dwivedi
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Synopsis
In a pivotal announcement, General Upendra Dwivedi highlighted how recent GST reforms will revolutionize India's defence sector. By abolishing GST on weapons and drastically reducing rates on drones, the initiative paves the way for unprecedented investments and innovation, benefiting the Indian Army and startups alike.
Key Takeaways
- GST reforms abolish taxes on military equipment.
- Drone GST reduced from 28% to 5%.
- Increased investment potential for defence corridors.
- MSMEs can invest more in R&D and manufacturing.
- Enhanced capabilities for the Indian Army.
New Delhi, Sep 5 (NationPress) Chief of the Army Staff, General Upendra Dwivedi, expressed on Friday that the recent GST reforms will significantly enhance our defence corridors, enabling us to increase investments and anticipate improved outcomes.
In a significant advancement for the defence industry, the Goods and Services Tax (GST) on numerous weapons, military aircraft, and essential equipment has been completely removed.
Furthermore, the GST on drones has been dramatically reduced from 28 percent to 5 percent.
At a recent event, Dwivedi expressed gratitude to the government for implementing these GST reforms.
"The primary advantage is that our defence corridors will receive a substantial uplift, allowing us to increase our investments and expect double the results. Additionally, MSMEs and startups, which traditionally struggle with limited funding, will now find it easier to invest in research, development, manufacturing, and equipment upgrades for the Indian Army," he stated.
Under the GST 2.0 framework, several weapons previously subjected to the 18 percent GST rate have now been classified under the nil GST category.
This includes 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, the GST has been eliminated on missiles launched from Remote Pilot Aircraft (RPAs) utilized by the armed forces.
GST has also been removed from GSAT systems, ship-launched missiles, flight motion simulators, underwater vessels, and ejection seats for fighter jets, ensuring pilots can escape safely during emergencies.
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Point of View
I believe these GST reforms represent a significant step towards fortifying India's defence capabilities. By easing the financial burdens on defence production and encouraging investments in technology and innovation, we ensure that our armed forces are well-equipped to face modern challenges. This initiative is a positive move for national security.
NationPress
05/09/2025
Frequently Asked Questions
What are the key benefits of GST reforms for defence?
The GST reforms will abolish taxes on various military equipment and reduce drone taxes, facilitating greater investments and innovation in the defence sector.
How will startups benefit from these reforms?
Startups, particularly MSMEs, will find it easier to invest in research and development, enhancing their contributions to the Indian Army.
