The Council of Goods and Services of India has reduced the rate on solar cells and modules from 12% to 5%, with effect from 22 September, aimed at reducing costs and stimulating the domestic production of solar energy.
The GST -Council of India has reduced the GST percentage on solar cells – assembled in modules – from 12% to 5%, with effect from 22 September.
The tax reduction is expected to make solar cells and modules more affordable, so that greater acceptance of solar energy systems in residential, commercial and industrial consumers will be allowed. As the costs fall, the move will probably speed up the transition to renewable energy.
The GST -Council has also reduced the tax rate to 5% for other devices for renewable energy and parts that are used in their production. These include solar energy-based devices and generators, solar cooking, solar panel or solar lamps, windmills, electricity generators operated by wind, waste-to-energy plants, bioga plants and ocean wave or tidal energy devices and plants.
Girishkumar Kadam, senior vice president and group head at ICRA LTD., said that the rationalization of GST rates for solar modules and wind turbine generators will lower the capital costs for solar and wind energy projects by approximately 5%. He added that this is expected to lower the costs of generation for solar energy projects.
‘[The move] Would lower the capital costs for under-implementation projects and probably also reflect in coming bids, “said Kadam.” This will in turn go to the energy distribution companies in the form of lower purchase costs in the electricity, in the future. “
Amit Paitankar, CEO and all the time director of Wae Energies Ltd, said that the GST rationalization reflects the government’s dedication for the transition from clean energy of India. He said that the uniform rate of 5% will reduce project costs and the capacity extensions that are needed to achieve the goals of the Indian certain energy consumption, while it is sent a strong signal to investors and the financial viability of the renewable energy sector improves.
“This development will immediately help to lower the total costs of solar modules. Although the exact reduction depends on project specifications and configurations, customers can expect a tangible decrease in module prices, which further strengthens the case for the acceptance of solar energy,” Paitankar added. “The move will also help to expand the adoption of solar energy in households throughout the country, to support the implementation of Prime Minister Surya Ghar Yojana.”
He noted that although the new rate can temporarily increase the reverse tax, the government’s focus on faster reimbursements of the Input Tax Credit (ITC) will help tackle this. “In general, these GST reforms will reduce the costs of green electricity for consumers, strengthen domestic production chain, create jobs and promote energy dependence,” said Paitankar.
Visit our visit PV Magazine India website.
This content is protected by copyright and may not be reused. If you want to work with us and reuse part of our content, please contact: editors@pv-magazine.com.
