India’s Finance Minister, Arun Jaitley, confirmed a solar GST rate of 5 percent at the 15th meeting of the GST Council held today. This official clarification ends a week of confusion and uncertainty. The solar industry can now move forward and plan ahead based on the 5 percent rate. However, further clarification should be issued about what happens to current projects under development, including the change in law provisions.
The Goods and Services Tax (GST) schedule was released on May 18th, where solar cells and modules were assigned an 18 percent tax rate. But in another part of the report – all renewable energy devices and spare parts for their manufacturing, including bio-gas plant, solar power based devices and solar power generating systems, wind mills and wind operated electricity generators, waste to energy plants/devices, solar lantern/solar lamps and ocean waves/tidal waves, and energy devices/plants, are listed under the 5 percent tax rate.