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GST Council Slashes Renewable Energy Tax to 5%

9/4/2025

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Summary

Story summary

The GST Council has lowered the tax on renewable energy components from 12% to 5%, effective September 22, 2025.
This change aims to enhance affordability and support India's clean energy transition.
The reduction is expected to boost demand for renewable energy projects and align with climate action commitments.
It will also address the inverted duty structure and improve cash flow for manufacturers and developers.

History

Historical Context

The 2016 Paris Agreement saw 195 countries, including India, commit to limiting global warming. India pledged to boost its renewable energy capacity to 175 GW by 2022. In line with this, the GST Council reduced taxes on renewable energy components from 12% to 5%, aiming to enhance affordability and stimulate demand for clean energy, crucial for India's climate commitments and sustainable growth.

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Story summary

The GST Council has lowered the tax on renewable energy components from 12% to 5%, effective September 22, 2025.
This change aims to enhance affordability and support India's clean energy transition.
The reduction is expected to boost demand for renewable energy projects and align with climate action commitments.
It will also address the inverted duty structure and improve cash flow for manufacturers and developers.

1 / 2