Lower GST on renewables to accelerate green projects but…

Lower GST on renewables to accelerate green projects but all eyes on input price fluctuations

The Union government, in a statement, post the GST announcement said these goods already faced inverted duty structure. “While reducing the GST rate to 5% will deepen inversion, mechanism for refund arising out of inverted duty structure is available. In addition, process reforms will ensure expedited refunds. The objective is to promote renewable energy goods,” the finance ministry said.

The biggest beneficiaries of the GST reduction, according to Paithankar and Rustagi, will be the rooftop solar segment, giving a boost to PM Surya Ghar Muft Bijli Yojana; as well as the commercial and industrial (C&I) sector, which is increasingly lapping up decarbonisation solutions to meet its own sustainability goals and achieve cost savings.

Gyanesh Chaudhary, Chairman and Managing Director, Vikram Solar said lower taxes will decrease project costs and will accelerate solar adoption across sectors, while bringing clean energy closer to millions of homes and businesses. “Equally significant is the reduction in tax on non-lithium-ion batteries from 28% to 18%. As India increases its renewable energy generation, building scalable, long-duration energy storage solutions is critical for grid stability and round-the-clock power,” he said.

The government’s move to reduce GST will directly help reduce the overall cost of solar modules, according to Paithankar. “Waaree is committed to passing on these benefits to customers, which will make our products more competitive in the market. While the exact reduction will depend on project specifications and configurations, customers can expect a tangible decrease in module prices, further strengthening the case for solar adoption,” he said.

The items in the sector for which GST has to been slashed from 12% to 5% include bio-gas plants, solar power-based devices, solar power generators, wind mills, wind operated electricity generator, waste to energy plants and devices, solar lantern, solar lamp, solar cookers, ocean waves and tidal waves energy devices and plants, solar cells.