A Goods and Services Tax, or GST, Council panel has recommended cutting the tax rate on green hydrogen.
The GST panel has proposed reducing the tax from 18% to 5% to boost the affordability and adoption of green hydrogen in India’s clean energy sector.
The GST fitment committee also supports lowering tax rates on crucial green hydrogen production equipment. It has proposed a 5% tax on both electrolyzers and energy storage batteries, aligning with the government’s broader strategy to bolster green energy infrastructure.
The government will present these tax recommendations at the upcoming GST Council meeting in July. The council will then make the final decision on implementing the proposed rate cuts.
The clean energy industry welcomes these potential changes. Industry players assert that high GST rates previously hindered the affordability and competitiveness of green hydrogen and storage solutions. They believe lower taxes will accelerate adoption and help India achieve its renewable energy and decarbonization goals.
International cooperation also supports India’s green hydrogen ambitions. The India-EU Clean Energy and Climate Partnership, for instance, fosters joint research, development, and potential green hydrogen imports, further emphasizing the need for accessible green hydrogen technologies.
