Adani Probe Shadows Government’s Withdrawal of Missile Import Exemption

The central government has revoked the tax exemption policy on importing missile components, a major step amid the ongoing investigation into the Adani Group's defense division. In a notice issued on October 9, the government revised the exemption policy announced in September by removing the word "missile." 

As a result, only certain components of long-range missiles will be exempt from import duties, while customs duties will still apply to parts of short-range missiles. Previously, a notification in September permitted duty-free import of all missile components, both long and short-range, to support the defense sector. This was expected to benefit several defense firms, including Adani Defense Systems and Technologies.

However, this exemption has now been rescinded through a new notification. The government has not explained this change. Krishnan Arora, a partner at Grant Thornton India, stated that this move reverts the policy to its former framework. He added, "For the first time, the government had decided to provide tax exemption on all missile components, but now that decision has been withdrawn." The Adani Group has already confirmed that it has submitted all relevant import data and documents to the authorities. However, neither the group, the Finance Ministry, nor the Board of Indirect Taxes has commented on this recent change.