Centre Rationalises Drone Taxation: Uniform 5% GST, IGST & Customs Duty Relief For Flight Simulators

The Union Government has informed the Lok Sabha that drones across all categories will now attract a uniform 5% GST, following the recommendations of the 56th GST Council Meeting held on 03.09.2025, aimed at removing classification disputes and promoting ease of doing business in the aviation and emerging-technology sectors. Replying to Unstarred Question No. 708, the Minister of State for Civil Aviatio, stated that the GST Council's decision rationalises the earlier structure under which drones attracted multiple GST slabs 5%, 18% and 28%, often leading to interpretational uncertainty and higher compliance burden. The new flat 5% rate is expected to boost drone affordability and adoption across industries. Customs Duty & IGST Exemption For Flight Motion Simulators The Minister further informed that the Government has issued Notification No. 37/2025-Cus., dated 17.09.2025, granting exemption from Basic Customs Duty (BCD) and IGST on Flight Motion Simulators and their parts, when imported by the Ministry of Defence, Defence Forces, Defence PSUs, other PSUs, or any entity importing them for Defence Forces' use. This measure is expected to reduce costs and facilitate advanced aviation-training infrastructure in India. Ease of Doing Business & Long-Term Impact According to the Government, GST rationalisation aims to simplify compliance by eliminating classification disputes and making drone technology more competitive. Though the immediate economic impact cannot be quantified, the Centre expects the reforms to boost domestic manufacturing, employment generation, and regional aviation-training ecosystems in the long run. The GST changes apply uniformly across all States and sectors where drones are deployed. No Immediate Plan for New PTOs or Drone Training Centres Responding to queries regarding setting up new Pilot Training Organisations (PTOs) in Sirohi (Rajasthan) and Drone Training Centres in Dahod (Gujarat) and Jamshedpur (Jharkhand), the Government clarified that no such proposals are currently under consideration. Click Here To Read/Download

Centre Rationalises Drone Taxation: Uniform 5% GST, IGST & Customs Duty Relief For Flight Simulators

Rajnandini Dutta

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