New Delhi, India – Indian Space Association (ISpA), the apex industry association representing the Indian space sector, is leading an appeal for fiscal initiatives in the upcoming Union Budget for 2024-25 to strengthen the financial foundation of the space industry. ISpA proposes extending the Goods and Services Tax (GST) exemption to satellite companies and ground equipment manufacturing, along with tax holidays and exemptions tailored for the space sector.
The association emphasizes the necessity for concessions on customs duties, particularly for specified imports like satellites and launch vehicles. Clarity in the foreign direct investment (FDI) policy for the space sector is also highlighted. ISpA suggests a Production Linked Incentive (PLI) scheme for space-grade components to boost manufacturing capabilities. Financial recommendations include a 5 percent tax rate on external commercial borrowings and a capital subsidy on infrastructure investments.
Lt Gen AK Bhatt, Director General, ISpA, underscores the role of a robust regulatory regime in identifying fiscal and taxation challenges for facilitating development and innovation in the space sector. The appeal predicts that the Union Budget for 2024-25 will provide a favorable environment within which the Indian space sector would bloom.
A tax holiday is a temporary period of either reduction or elimination of certain taxes or categories, employed by governments to stimulate economic activity and cause development in particular industries/sectors. It offers financial incentives through diminished tax obligations for a specified period, aiming to entice businesses, investors, and entrepreneurs. The timeframe and applicable taxes are determined by the government or relevant tax authorities, creating a favorable environment for economic development and increased investment.
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