Indian Green Industry Responds To GST Revisions On RE Products

A day when the GST Council decided to reduce Goods and Services Tax (GST) on key renewable energy items like solar cells, modules, wind energy equipment and other items, key industry leaders have responded to the changes. Most of the leaders welcomed the decision owing to the lesser burden on manufacturers and developers.

The reduction in taxation was a long-pending demand of the solar industry. A number of the top management of several big and smaller firms were demanding slashing GST rates on solar items be slashed to spur their growth. Several companies had demanded and expressed these concerns during the budget expectations. But till not these were not met. The higher taxation on products and solar energy generation often escalates project costs. Many now see this as a major relief. 

Below are the insights shared by industry leaders on the recent GST rate revision-

"The decision by the GST Council to reduce the GST rate on solar components from 12% to 5%  greatly increases the accessibility of solar installations for households, businesses, and farmers across the country. By reducing this financial barrier, the government is making solar power more affordable and enabling faster adoption. We believe this tax break will not only boost energy security and encourage new project pipelines but also contribute meaningfully to India's climate action commitments and its global responsibility to combat climate change."

Gautam Mohanka, Director, Gautam Solar

--------------------------------------------------------------------------------------------------------------

‘GST Council has taken a historic step to reduce taxes on renewable energy components to 5% from 12%. This move not only brings down the cost of solar and clean energy solutions but also energizes the entire ecosystem—manufacturers, developers, and end users alike. It will also help in India’s clean energy momentum and make sustainable solutions more accessible to millions.’

Dhruv Sharma, CEO, Jupiter International Limited

--------------------------------------------------------------------------------------------------------------

The reduction from 12% to 5% in GST on solar modules is great news for the industry and a win-win for all stakeholders. Lower costs for consumers are expected to boost demand, drive India’s renewable energy transition, and contribute to achieving the target of 500 GW non-fossil fuel based capacity by 2030. We expect the rooftop solar and corporate markets to be the biggest beneficiaries. The industry is also very happy about the steps taken to reduce the impact of inverted duty structure with measures like provisional refunds.

Vinay Rustagi, Chief Business Officer, Premier Energies

--------------------------------------------------------------------------------------------------------------

The reduction of GST on renewable energy devices and equipment to a uniform 5% will lower project costs and accelerate the capacity addition needed to meet India’s clean energy targets. It also sends a strong signal to investors, improving the financial viability and attractiveness of the renewable energy sector. Moreover, this development will directly help reduce the overall cost of solar modules. Waaree is committed to passing on these benefits to customers, which will make our products more competitive in the market. While the exact reduction will depend on project specifications and configurations, customers can expect a tangible decrease in module prices, further strengthening the case for solar adoption. The move will also help expand solar adoption in households across the country, supporting the implementation of the PM Surya Ghar Yojana. While the new rate may temporarily increase the issue of inverted taxation, we are confident that the government’s focus on faster Input Tax Credit (ITC) refunds will help address this. Overall, these GST reforms will reduce the cost of green power for consumers, strengthen the domestic manufacturing value chain, create jobs, and promote energy independence.

Amit Paithankar, CEO, Waaree Energies 

-----------------------------------------------------------------------------------

The reduction of GST on renewable energy equipment from 12% to 5% will significantly improve project cost efficiency, enabling faster deployment of clean power. Lower capital costs will translate into more competitive tariffs in auctions, supporting quicker capacity addition and passing direct benefits to consumers.

Akshay Hiranandani, CEO, Serentica Renewables

-------------------------------------------------------------------------------------

The recent revision in GST is a progressive step for the sector. By easing the tax burden on critical components, the government has reinforced its commitment to accelerating India’s clean energy transition. This reform will benefit developers, power producers, and consumers alike by lowering project costs, enhancing viability, and enabling faster adoption across industries and utilities. Importantly, it also strengthens the case for domestic manufacturing, supporting India’s efforts to build a resilient supply chain for critical components. More competitive and higher-yield projects will attract greater investment into the sector, fueling India’s renewable energy ambitions.”

Rajeev Kashyap, SVP and General Manager for India, Middle East, and Africa, Nextracker

------------------------------------------------------------------------------------

The rationalization of GST rates on automotive vehicles and parts is a truly welcome and significant development. By making vehicles more affordable across all segments, this move will not only boost consumer spending but also simplify complex classification disputes that have long burdened the industry. The discontinuance of the cess is a particularly pragmatic step, which will provide much-needed support to a sector that is a vital contributor to our nation's GDP.

Saurabh Agarwal, Partner & Automotive Tax Leader, EY India

--------------------------------------------------------------------------------------------------------------

"The GST Council's decision to reduce the tax rate on renewable energy components- including solar cells, windmill equipment, and biogas plants- to 5% represents a critical step forward for India's clean energy transition. As a hybrid IPP player committed to accelerating the adoption of renewable power, this move significantly lowers the input costs for project development and module manufacturing, thereby enhancing the overall economics of renewable energy projects. Moreover, addressing the inverted duty structure with expedited refund mechanisms will streamline liquidity for manufacturers and developers, easing cash flow allowing faster capacity expansion." 

Siddharth Bhatia, MD, Oyster Renewable Energy 

--------------------------------------------------------------------------------------------------------------

In a landmark move, the GST Council has announced a significant reduction in GST rates across key sectors — a decision set to boost consumption, support MSMEs, and energize the Indian economy. From reducing rates on essential goods to simplifying compliance for small businesses, this step marks a pivotal shift toward making India a more business-friendly and consumer-centric market.

Niket Shah, Director, Aatmanirbhar Solar 

--------------------------------------------------------------------------------------------------------------

The continuation of the 5% GST rate on electric vehicles is a positive step in maintaining affordability and supporting demand in the segment. As the sector grows, there is increasing relevance in exploring GST rationalisation for the broader EV ecosystem including batteries, charging infrastructure, and battery swapping services. A uniform tax structure across these components could help reduce operational inefficiencies, streamline costs, and improve accessibility for both manufacturers and consumers.

Pratik Kamdar, Co-founder & CEO, Neuron Energy