Revitalizing Biogas: GST Reduction Fuels New Opportunities in India

The recent reduction in Goods and Services Tax (GST) on biogas plants, from 12% to 5%, is expected to invigorate the sector, according to the Indian Biogas Association (IBA). This move is part of a broader tax overhaul aimed at simplifying the structure and fostering private investment in green energy.

The GST Council's decision to reduce tax rates on 375 items and consolidate slabs from four to two marks the biggest change since the GST's launch in 2017. The IBA anticipates that the GST cut will make biogas projects more appealing and viable, potentially leading to a 4-5% increase in new investments.

By 2030, the sector expects to attract USD 4-5 billion in private investments, significantly boosting jobs in manufacturing, installation, and maintenance. The reform aligns with India's broader goal to reduce tax loads on renewable energy sources, facilitating access to sustainable energy in rural regions.