The new tax policy implemented in India by the Central government. Government Hikes 5% Tax On Solar Power Equipments in india also reflect a change in the prices of solar power equipment. A government official said that the new policy will add 5 percent tax to the equipment used for the solar power generation. Revenue secretary Hasmukh Adhia tweeted about this on Sunday which said that all solar power equipment and its necessary parts will have 5 percent GST. Initially, it was planned for 2 slabs of taxes. One with 5 percent and other with 18 percent.
currently, India is the world’s 3rd biggest country who produce greenhouse gases. India set a target of 100 GW of solar power in 5 years and by this way to reduce the carbon footprint. This 5 percent tax increase will make solar power generation more expensive. In the previous notification, it had fixed an 18 percent of the tax for the photovoltaic cells and panels which will again increase the solar power generation costs.
The domestic coal industry will now attract an 11.69 percent duty in the coming days. The state-run Coal India Ltd is burning with tons of unsold coal became the biggest beneficiary of the decision. This new tax rates will hurt the young and booming solar industry badly. Most of the cells are importing from China for solar energy production. Also, the rate of solar energy comes down to a record low of 2.44 rupees per unit earlier in this month.
The Indian government is also planning to provide capital subsidies and cheaper loans for clean energy production and thus fulfilling the dream of our prime minister Narendra Modi of raising renewable energy capacity by more than 5 times in the next five years in order to fight against climate changes.
In the last 3 years, the solar power generation capacity of India got triples to 12 GW which is due to the lower module prices and borrowing costs. We still need to get a clarification of GST on solar power products and we hope the taxes with subsidies will help this booming industry.