Union Budget 2024-25 Eyes GST Reforms, Boost for Renewable Energy

Union Budget 2024-25 Eyes GST Reforms, Boost for Renewable Energy
The upcoming Union Budget for the fiscal year 2024-25, to be presented by Finance Minister Nirmala Sitharaman on July 23, is expected to bring significant reforms to the power sector, including its potential inclusion under the Goods and Services Tax (GST). The National Solar Energy Federation of India (NSEFI) has proposed a series of measures aimed at reducing costs and fostering growth within the renewable energy sector.
Currently, the power sector is not covered under GST, which was implemented on July 1, 2017. This exemption has led to an increased tariff burden due to the cascading effect of indirect taxes. NSEFI's proposal for GST inclusion seeks to streamline taxation and lower costs for consumers and businesses alike.
Further recommendations by NSEFI include maintaining the exemption from basic customs duty on imports of key renewable energy components such as wafers, ingots, and polysilicon. This move is intended to bolster the domestic manufacturing of renewable energy infrastructure.
Another significant aspect of NSEFI’s proposals is the removal of electricity duty (ED) and cross-subsidy surcharge (CSS) on power used in charging Energy Storage Systems (ESS). This measure is expected to encourage the use of energy storage technologies, which are critical for balancing the intermittency of renewable energy sources.
Additionally, the federation has urged the government to introduce Viability Gap Funding (VGF) for Pumped Storage Projects (PSP), similar to the existing support for Battery Energy Storage Systems. This would promote the development of sustainable energy storage solutions, crucial for enhancing India's energy security and integrating renewable resources.
NSEFI also seeks support for 100 agrivoltaic pilot projects across India, aiming to synergize solar power generation with agriculture. This initiative is designed to benefit farmers while aiding the nation in meeting its renewable energy targets.
These proposed reforms, if accepted, could significantly impact India's energy landscape, encouraging investments and technological advancements in the renewable energy sector as the country pushes towards its 2030 energy goals. The budget's focus on GST inclusion and support for renewable energy components and storage systems highlights the government's commitment to sustainable development and reducing carbon emissions.
As the country anticipates the budget announcement, stakeholders in the renewable energy sector remain optimistic about the potential for transformative changes that could drive growth and innovation in the industry.