A panel under the Goods and Services Tax (GST) Council has recommended slashing the tax rate on green hydrogen from the current 18% to 5%, according to sources familiar with the discussions. The move aims to make green hydrogen more affordable and accelerate its adoption in India’s clean energy ecosystem.
Lower GST Also Proposed for Electrolysers and Storage Batteries
In addition to green hydrogen, the GST fitment committee has also backed reducing tax rates on electrolysers—crucial equipment for green hydrogen production—and energy storage batteries. Both items are proposed to be taxed at a reduced rate of 5%, aligning with the government’s broader strategy to support green energy infrastructure.
Final Decision awaited in July GST Council Meeting
The government will present these tax recommendations at the next GST Council meeting, expected in July. The Council will then decide whether to implement the proposed rate cuts.
Industry Welcomes Move, Highlights Benefits
The clean energy industry has actively lobbied for these changes, arguing that high GST rates were hampering the affordability and competitiveness of green hydrogen and storage solutions. Industry players believe that lower taxes will encourage faster adoption and help India advance toward its renewable energy and decarbonization goals.
Global Cooperation Supports Green Hydrogen Push
International cooperation, including the India-EU Clean Energy and Climate Partnership, also supports India’s green hydrogen ambitions. As reported by gstpress.com, the partnership fosters joint research, development, and potential green hydrogen imports, further underlining the importance of making green hydrogen technologies more accessible.
