India’s Goods and Services Tax (GST) Council, the joint forum of the Centre and States, has reduced the GST rate on renewable energy components from 12% to 5%.
Taking effect from 22 September, 2025, the components include solar power equipment, solar cookers and lamps, windmills and generators, waste-to-energy systems, biogas plants and tidal or wave energy installations.
At the same time, the GST on coal and lignite will see a steep increase from 5% to 18%, reflecting the government’s push to make renewable energy more cost-effective and competitive, while discouraging fossil fuel use.
According to an official notification from the Central Board of Indirect Taxes and Customs, the GST revision aims to “promote renewable energy goods in the country” and reduce India’s dependence on imported solar modules, particularly from China.