Impact of GST on Solar and Coal Power in India

In this report, the authors have analysed the impact of the Goods and Service Tax (GST) on the Solar sector vis-a-vis the coal sector. The analysis fills an important gap considering the high share of thermal power in the energy grid in India, as compared to the high hopes from Solar power going forward.

Do government policies walk the talk? Not necessarily, indicates the findings here.

Not only has GST actually favoured coal fired energy production more, the tax has also effectively ended the funding for National Clean Energy and Environment Fund (NCEEF) as this was funded by a coal cess of Rs 400 per tonne, now subsumed within the GST. And with GST surplus being used to cover up for tax shortfalls at state level, there is effectively no funding for the NCEEF.

This March 2019 report is relevant as the status quo remains even after the presentation of the Union Budget 2019 in July.