NEW DELHI: Goods and Service Tax Council Secretary Hasmukh Adhia on Monday allayed concerns of solar panel makers and clarified that solar panel equipment will attract the lowest tax rate of 5 percent under the GST regime, as against the initially proposed 18 percent.
Solar water heater and system, renewable energy devices and spare parts for their manufacture, bio-gas plant, solar power-based devices, solar power generating system and windmills and wind-operated electricity generator will attract a 5 per cent tax rate.
However the industry was concerned with 18 per cent GST on equipment for solar panel manufacturing.
Revenue Secretary Hasmukh Adhia took to Twitter to clarify that, “All solar equipment and parts would attract 5 per cent GST only”.
GST Council is likely to clarify this ambiguity soon, sources in GST Council said.
The clarification is important, since Power Ministry is targeting 175 gigawatts of renewable energy generation by 2022. Out of this, 100 GW would be from solar power, that would require an investment of about Rs Six lakh crore.
The proposed clarification is critical to ensure that duties are lower on solar power equipment, officials in GST Council secretariat said.
The Council had this month fitted over 1,200 goods and 500 services in four tax brackets.