How has GST impacted Solar Rooftop Industry In India?
lubi solar       July 18, 2019
GST also is known as the Goods and Service Tax is an indirect tax which was implemented on 1st July 2017, this tax was implemented on various kinds of goods and services like the restaurants, hospitals, shopping websites and etc in order to create revenue for the govt and to free the common public from various other indirect taxes.
GST was actually the common indirect tax for the whole country, this was also further divided into CGST- Central goods and service tax and SGST- State goods and service tax which was made for the convenience for both the govt and the common people.
GST has brought so many benefits for the common people as well for the govt, with the earlier tax system there were various kinds of taxes which govt and the state govt imposed on the common people which actually was a big burden on the people, also the tax which the common people was paying was only benefiting the state govt and the total economy was a loss.
With GST, the hard earned money which was paid in terms of taxes has served the economy very well and can be used for the benefit of common people. The rooftop solar industry in India also one of those who have to pay using the GST since this has been now uniformly used tax mode in India.
The Rooftop solar panels are now commonly used in many houses since it is clean and environment-friendly energy which is quite capable of doing the regular stuff we use through coal produced energies. The solar energy is basically the sunlight which is stored used the solar panels placed in the places where the sunlight comes in the maximum amount mainly rooftops are used in houses.
In the pre-GST era, the solar energy industry was actually tax-free which included the solar panels and the input devices since resources used were certainly free and with GST imposed on it has made the total cost for the individual owners a little more higher than earlier which is certainly a negative but it had definitely benefited the industries and the commercial companies since they did not do not need the costly electricity grids to generate electricity for their production and there has been a decrease in the solar panels and other devices.
So, this means that the rooftop solar industry has both negative and positive effect due to GST imposed on it which is again beneficial if we look at the long term tax investments since now there is a uniform tax and you do not even need to pay taxes monthly so the extra burden is certainly lessened.
Though there has been a marginal increase in the total taxes on the rooftop solar industry which is around 5-8% this actually increased the cost for the residential owners who have been helping in making the environment clean and better for the future generation since the solar energy is a clean and environment-friendly plus it is renewable which means the raw material for generating this type of energy which is not getting finished or decreasing in coming future.
Hence, the scope of solar energy in homes and industries & commercial places is higher but with the tax imposed on it makes it very difficult in increasing the power it is producing because the overall production becomes costly. Yes, certainly the cost of solar panels and other inputs has been increased but the tariff plans and installation cost is increased making it costlier as compared to earlier.
The Lubi solar as a company thinks that overall, the GST has been negatively impacted on the rooftop solar industries since it has increased the cost of various projects which comes under the subsidiary scheme because of the increased Purchase of EPC ( engineering procurement and construction) has made things even more difficult for the developers.
India has been going under various developmental schemes in which the solar industry is also advancing itself in which it is estimated that the increase by 175GW renewable energy in which 100GW is to be alone produced by the rooftop solar industry. But with the sudden imposition of the GST has slowed down the development which has been going since it has made raw materials costlier which actually made the production costlier.
No matter how good the GST is but it has both positive negative and positive effects on the economy of the country since it has converted all the taxes into one overall tax which has increased the profit to the central got since it has increased the revenue system which is now used for various developmental purpose like the construction of roads, providing better and safer public transport, in-house facilities like the availability of the daily usage things and many more. But yes, It has also caused some negative effects also like the cost of a few things has been increased to higher levels, few things which were tax-free earlier now comes under certain taxes which certainly has increased the resultant product.
But all and all, the taxes are used for providing benefits to the common people hence everyone should pay their taxes honestly and do their duty of being a responsible citizen.