GST on all solar components at 5%
The Goods and Service Tax (GST) rate on inputs for solar components has been cut to 5% from the 18% set by the GST Council in its May 18 meeting, according to Revenue Secretary Hasmukh Adhia. “All solar equipments and its parts would attract 5% GST only,” Mr. Adhia tweeted. This should put to rest concern in the industry, as the 18% rate was likely to have had a significant impact on solar energy tariffs. The confusion arose because, while all of renewable energy including solar energy was placed in the 5% tax slab, solar modules were placed in the 18% slab. The formal announcement of the new tax rate is expected to be made at the next GST Council meeting on June 3.
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