Advertisement
Advertisement
advertisement

GST poses a big risk for Indian solar industry: Report

Renewable sector, currently a beneficiary of several indirect tax exemptions, may be a big loser if goods and service tax is implemented since the bill proposes to revoke most of these exemptions. Costs and tariffs are expected to rise by 12-20% as a result. 

 

GST is a key taxation reform as it seeks to simplify a complex maze of state and central taxes by subsuming these into a single tax levied at the point of consumption. According to reports the Bill could be passed by July 2016. 

 

A cost increase of this magnitude would also put viability of several projects in jeopardy. The Ministry of New and Renewable Energy (MNRE) is in dialogue with the Department of Revenue to ensure that renewable power equipment is exempted from GST.  

 

A recently concluded study by MNRE suggests that solar project costs and tariffs could go up by 12-20% on account of the new indirect taxation proposal. Such a material increase would erode most of price gains made in the past two years and also put viability of several ongoing projects in jeopardy. 

 

Costs would rise because at present there is no import duty or indirect tax is applicable on solar modules but under the new regime, GST of 17-20% would be payable thus increasing costs. Local value added tax (VAT) and other levies such as excise, entry tax and Octroi on solar modules and the complete system is around 5% in most states because of a slew of exemptions. 

 

The MNRE report estimates that the cost for all equipment used in a solar project -- solar modules, inverters, cables, batteries and structures will go up adding up to a differential of 12-20% from current levels. 

Advertisement
Advertisement

UPCOMING EVENTS

SolarQuarter Tweets

Follow Us For Latest Tweets

SolarQuarter SolarRoofs Karnataka 2019 is almost here! Buy your ticket today https://t.co/CVIqStbToI See you on Oct 04, 2019!… https://t.co/M0Yhv1lvRI
Saturday, 17 August 2019 05:10
SolarQuarter Smart Manufacturing Needs Smart & Clean Energy_Join Us For The Pune Edition - https://t.co/QrKk6xwU19
Friday, 16 August 2019 07:31
SolarQuarter Sri Lanka Solar Week 2019 is almost here! Buy your ticket today https://t.co/HSLG4PzL8E See you on Aug 29, 2019!
Thursday, 15 August 2019 04:30