GST reforms: Lower taxes on renewables and cement to ease project costs, accelerate green and infra adoption

New Delhi: The GST Council’s decision to slash tax on renewable energy equipment from 12% to 5% and reduce cement to 18% has drawn strong support across industries, with stakeholders saying the reform will lower project costs, accelerate clean energy adoption, boost domestic manufacturing and ease consumer burden.Rajiv Ranjan Mishra, MD, Apraava Energy, said: “The Goods and Services Tax (GST) reform announced to reduce tax rates on renewable equipment from 12% to 5% is a transformative step that will act as a catalyst for India’s energy transition. This move is expected to encourage domestic manufacturing under the Government’s Make in India mission and provide a much-needed boost to renewable capacity and further accelerate India’s RE goals.”Vipin Tiwari, Corporate Strategy Manager, AXITEC Energy India Pvt. Ltd., said: “The decision to cut GST on solar products from 12% to 5% is a welcome move to make clean energy more affordable, particularly for domestic consumers not registered under GST. This reduction eases the financial burden on households, supports the PM Surya Ghar Yojana, and is expected to accelerate solar adoption.”In the transport sector, Rana Dutta, Senior Vice President, CNG Marketing & Business Development, THINK Gas, said: “By bringing down the GST rate on commercial vehicles where CNG contributes significant volume from 28% to 18% and CNG cars under 1200 cc from 29% (inclusive of cess) to 18%, the GST Council has created a strong incentive for customers to choose environment-friendly alternative. This reform is expected to significantly boost demand in the automobile sector while accelerating the adoption of natural gas as a preferred fuel.”Sumant Sinha, Founder and CEO, ReNew, said: “The reduction of GST rates on solar equipment and batteries to 5% from 12% will lower electricity costs, enhance industrial competitiveness, and accelerate India’s clean energy transition. Removal of the compensation cess on coal and merging it into a higher GST rate of 18% will also effectively bring down the costs of thermal power.”

Vivek Bhatia, Managing Director and CEO, TKIL Industries, noted: “The cut in GST on cement from 28% to 18% will speed up infrastructure development and make adding capacity more appealing. Cutting GST on renewable devices and fuel-cell vehicles aligns India with its decarbonization strategy. From the perspective of TKIL Industries, these reforms will go far beyond just the tax reduction that will be immediate, but will provide a big positive push.”