In Short : A government panel has recommended reducing GST on green hydrogen, batteries, and electrolysers from 18% to 5%. The move aims to lower production costs, boost adoption, and support India’s clean energy goals. Backed by industry bodies, the proposal is expected to enhance domestic manufacturing competitiveness and accelerate the transition to sustainable fuels and energy storage solutions.
In Detail : A government-appointed panel has proposed reducing the Goods and Services Tax (GST) on green hydrogen, batteries, and electrolysers from the current 18% to a lower 5%. This recommendation is aimed at making clean energy technologies more affordable and commercially viable.
Green hydrogen is considered a key pillar in India’s energy transition strategy. By lowering GST, the government hopes to reduce production costs and encourage wider adoption across sectors such as mobility, industry, and power.
The panel’s recommendation also includes a reduction in GST for key components like batteries and electrolysers. These elements are essential for energy storage systems and green hydrogen production, both of which are critical to scaling up renewable energy integration.
Industry groups such as the India Energy Storage Alliance (IESA) have long advocated for a uniform 5% GST rate on clean energy components. They argue that high tax rates hamper growth and discourage investment in emerging green technologies.
By easing the tax burden, the proposal is expected to support domestic manufacturing and enhance the competitiveness of Indian companies in the global green energy market. It also aligns with the government’s goals of fostering self-reliance and attracting investments in clean tech.
The recommendation reflects a growing alignment between government policy and industry needs, as both sectors aim to accelerate decarbonization efforts. If implemented, the reduced GST rates could serve as a financial catalyst for India’s ambitious clean energy transition.
