GST Council Weighs Flat 5% Tax for Green Energy EPC Contracts
What Happened
As per a Moneycontrol report, the GST Council may discuss reducing the tax on the services component of renewable energy EPC (Engineering, Procurement and Construction) contracts from 18% to 5% at its October meeting. The move would align the GST rate on services with the existing 5% rate on renewable energy equipment.
Key Takeaways
The proposal aims to simplify taxation, reduce disputes arising from the current 70:30 goods-services split, and ease the inverted duty structure faced by developers. Industry players believe a flat 5% rate would lower tax accumulation and make renewable energy projects more cost-effective.