Uniform 5% rate on drones for business use on agenda

The Goods and Services Tax (GST) Council, in its next meeting, is likely to fix a uniform 5 per cent GST rate on all commercial-use drones, according to sources.

- MONIKA YADAV

This move aims to eliminate confusion in the classification of unmanned aircraft systems (UAS), also known as drones, and provide much-needed clarity to the industry.

This could be a major relief to India's burgeoning drone industry, which consists of around 488 drone companies that have collectively secured $518 million in funding so far, according to market intelligence platform Tracxn.

Currently, drones attract different GST rates depending on their classification under various HSN (Harmonized System Nomenclature) codes.

Drones for business use, categorised as aircraft under HSN code 8806, attract 5 per cent GST, while those with integrated cameras are taxed at 18 per cent under HSN 8525, as they are classified as digital cameras. Drones meant for personal use fall under HSN 8806 but are taxed at a much higher rate of 28 per cent.