Under the Goods and Services Tax (GST) system, renewable energy devices like solar panels, biogas plants, and windmill parts are charged with a 12% tax, the Government of India cited. Minister of State for Finance, Shri Pankaj Chaudhary, specified the same in the Rajya Sabha.
In reply to the question from Member of Parliament Shri Yerram Venkata Subba Reddy, who asked whether these devices draw only 5% GST, the statement has arrived. The Minister, in response, said that for these renewable energy items, there is a 12% GST rate and not 5%.
The GST rates are not decided by one person or office alone, Shri Chaudhary elaborated. On the GST council’s suggestion, they were founded, which comprises representatives from both the central and state governments. The counsel determined which items are imposed to tax and at what rate.
The EVs are also the subject of the Minister. Currently, EVs are also getting taxed at a lower 5% GST rate, which is under the plan of the government to promote clean transportation in India, he confirmed.
For Electric vehicles (EVs), the government has made insurance cheaper. Under the notification of the Ministry of Road Transport and Highways in 2022, the third-party insurance cost for EVs is 15% less compared to the regular fuel-based vehicles. The same rule supports making EVs cheaper for the public.
On renewable energy, GST clarification is important as many people and businesses thought that there was merely 5% rate.
Read Also: 5% GST Applies to the Supply of Solar Power Stations as a Composite Supply, Not a Works Contract
For clean transport, the lower tax on EVs is seen as a boost; however, experts cite that a 12% GST on the renewable devices can surge project costs and may slow down the shift to clean energy.
Till now, the government has been devoted to supporting both clean energy and electric vehicles in the future.
