The government’s surprise announcement that solar photovoltaic cells and modules will attract a levy of 18 per cent under the Goods and Services Tax (GST) regime that comes into force on July 1 caught the industry unawares, but experts said it was unlikely to have any lasting impact on the rapid growth of India’s solar energy sector.
The GST regime, which does away with state levies such as excise and value-added taxes, will unify the entire country into a common market. The government has proposed four slabs of taxes under the new system. According to a list of 1,211 items released after the meeting of the GST Council, which comprises finance ministers of all the states of the Union, “Photosensitive semiconductor devices; including photovoltaic cells, whether or not assembled in modules or made up into panels”, will be charged at a rate of 18 Goods and Services Tax (GST) regime. The effective rate for solar panels and modules currently stands at zero.
However, the council has proposed that renewable energy devices, which includes waste-to-energy and biogas plants, solar water heaters, solar lanterns and lamps, solar power generating systems and windmills, be charged at the lowest tax slab of per cent. The low five per cent tax on wind turbines is expected to keep project costs low for developers such as Inox Wind and Suzlon Energy, and soothe worries of the wind energy sector. Some battery types and components may get the highest tax of 28 per cent. Read More…
Credit By: India New England
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