Green Hydrogen GST Lower Rate Proposed to Boost Clean Energy
India is taking big strides in green energy. A recent government panel has proposed reducing GST on Green Hydrogen to just 5%. This move aims to make clean fuel more affordable and attract investments in India’s green hydrogen mission.
Why Slash GST on Green Hydrogen?
- Current Scenario:
- It increases project costs for industries shifting to cleaner fuels.
- Higher upfront costs hamper adoption in mobility, steel, and fertiliser sectors.
- Proposed Change:
- Panel suggests cutting GST rate to 5%.
- Expected to align with India’s National Green Hydrogen Mission.
- Legal Reference:
- GST Council holds powers under Article 279A of the Constitution.
- Any rate cut will follow a notification under the CGST Act, 2017.
Possible Benefits of Lower GST on Green Hydrogen
| Aspect | Current Impact | Expected Impact (5% GST) |
|---|---|---|
| Project cost | High capital burden | Reduced costs |
| Industry adoption | Slow | Faster switch to green fuel |
| Export competitiveness | Limited | Improved global market share |
| Climate goals | Hindered | Better compliance with net-zero targets |
Expert View: What This Means for Businesses
📌 Tip:
Industries planning to adopt green hydrogen should watch for an official GST notification. Early investment planning can help leverage lower costs once the rate cut is notified.
What Happens Next?
- Once approved, the Ministry of Finance will issue an official rate notification under the CGST Act.
- Businesses should update procurement contracts and input credit planning accordingly.
✅ Official Source: Check updates at gstcouncil.gov.in
Frequently Asked Questions
Q1. Is GST on Green Hydrogen reduced now?
A1. No. It is a panel recommendation. The final decision rests with the GST Council and a formal notification is awaited.
Q2. Can businesses claim input tax credit on Green Hydrogen?
A2. Yes, under current GST rules, input tax credit can be claimed subject to conditions under Section 16 of the CGST Act.
Q3. Where can I get updates?
A3. Follow gstcouncil.gov.in and Efiletax blogs for timely compliance news.
Efiletax Insight
At Efiletax, we help businesses stay ahead of such tax changes. Keep your GST planning clean and compliant. Contact us for updates, registration, and filing services.
Summary
A government panel has suggested cutting GST on Green Hydrogen from 18% to 5% to make clean fuel affordable and promote India’s net-zero goals. Once the GST Council approves, industries can benefit from lower costs. Stay updated on notifications with Efiletax.