BENGALURU: In a move to lower costs and remove longstanding ambiguities, the GST Council simplified the tax structure for unmanned aerial vehicles (UAVs). Commercial drones now attract 5% GST, while military drones, flight motion simulators, high-performance batteries and communication equipment, such as software-defined radios have been fully exempted. At the same time, GST on aircraft for personal use was raised from 28% to 40%.
Industry executives said the decision recognises drones as both an economic opportunity and a strategic necessity and is expected to accelerate adoption across 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,” said 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 directly 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,” said 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,” said Ankit Mehta, co-founder and CEO of listed player ideaForge.
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