GST reforms to strengthen clean-energy transition: Environment minister

Union Environment Minister Bhupender Yadav on Thursday described the government's overhaul of the Goods and Services Tax (GST) as a "historic Diwali gift" that will strengthen India's clean-energy transition.

In a post on X, Yadav said, "The GST rationalisation ensures that renewable energy remains the backbone of India's climate strategy."  In another post, he termed the move "GST Reforms for a Green India" and said it would help advance clean and green power adoption, improve waste management, lower emissions and protect ecosystems, while maintaining fiscal balance.

A steady adoption of solar, wind and waste-to-energy projects is critical for meeting India's Net Zero 2070 pledge and Nationally Determined Contributions (NDCs) under the Paris Agreement, he added.

The reforms, announced on Wednesday, include tax cuts on solar panels, wind turbines and related devices to reduce project costs and support domestic manufacturing, lower GST rates on effluent treatment services to boost centralised waste management and a steep reduction on biodegradable bags to help curb single-use plastics.

The GST on passenger buses and commercial goods vehicles has also been reduced from 28 per cent to 18 per cent, in a move expected to cut costs, encourage fleet modernisation and promote public transport.