In lieu of the tax rate on solar panels being fixed at five percent under the forthcoming Goods and Services Tax (GST), industry players believe that solar being placed at par with coal indicates that the country is moving towards grid parity. “The fact that coal and solar has been placed at par with one another augurs well for the long term energy security of the country. This, quite rightly, addresses the unique energy dilemma that India faces considering that close to 18,000 villages do not have access to energy, but, at the same time, the country has a strong commitment to reduce its carbon footprints,” said Anurag Garg, Vice President – Solar & Energy Storage Business, Schneider Electric India. Furthermore, Anurag said a five percent tax being levied comes as a big reprieve to the solar sector, as against the earlier classification of 18 percent.
In the 15th meeting of the GST Council held here on Saturday, Finance Minister Arun Jaitley announced that a five percent tax is chargeable on solar panels under the new tax regime. Among other commodities, prices of gold and biscuits are set to surge, with a tax rate of three percent and 18 percent levied on them respectively. Footwear, being one of the major items of discussion in the meeting, will be charged a five percent tax, if less than Rs. 500 and those above this amount will attract an 18 percent tax. Charge on silk and jute will be nil, cotton and natural fibre will be charged 5 percent, and manmade apparel will be 18 percent. Natural yarn will be charged 5 percent.
You may also to watch:
Also, a 12 percent charge will be levied on readymade apparel. A 28 percent tax will be levied on beedis, while a 14 percent charge will be imposed on the tendu patta used in beedis. However, no cess is applicable. The new tax regime is scheduled to be rolled out on July 1.