In a boost to India's renewable energy manufacturing sector, the Goods and Services Tax (GST) Council announced a substantial reduction in tax rates for clean energy components. The decision cuts the GST burden from 12 per cent to 5 per cent across a wide range of green technology equipments, making it one of the most significant policy supporting the country's clean energy transition.
The Central Board of Indirect Taxes and Customs issued an official notification explaining the reasoning behind this tax restructuring.
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"These goods already faced an inverted duty structure. While reducing the GST rate to 5 per cent will deepen inversion, a mechanism for refund arising out of the inverted duty structure is available. In addition, process reforms will ensure expedited refunds," the official notification stated.