Industry body India Energy Storage Alliance (IESA) on Monday hailed the new tax regime under GST 2.0, saying it marks a significant step forward in meeting India's future energy storage requirements.
According to a statement, several key recommendations put forth by IESA have been adopted by the GST Council.
"The IESA welcomes the new tax regime under GST 2.0, as it marks a significant step forward in meeting India's future energy storage requirements," it added.
The industry body had recommended that it is critical to encourage innovation across diverse chemistries, such as flow batteries, sodium-ion, metal-air, and other emerging systems.
In a significant policy shift under GST 2.0, the GST Council has heeded this call by streamlining the tax rate for all advanced batteries under heading 8507 to a uniform 18 per cent, replacing the previous regime, where lithium-ion batteries were taxed at 18 per cent and other chemistries were taxed at 28 per cent.
However, it said, a few major recommendations remain pending and are under active consideration.
The request to reduce GST on parts used in the manufacture of electric vehicles from 18 per cent or 28 per cent to 5 per cent remains under review, as the Fitment Committee cited concerns regarding an inverted duty structure.
The council will reconsider this matter after receiving Andhra Pradesh's detailed proposal.
Despite industry requests, the GST rate for cathode coating and separators used in lithium-ion batteries remains at 28 per cent to avoid end-use-based exemptions and classification disputes.
India Energy Storage Alliance (IESA) president Debmalya Sen said, "The GST 2.0 is a welcome move. We are delighted that all batteries, whether lithium-ion or otherwise, have been brought to the 18 per cent GST bracket. We at IESA had been advocating the same for long, this will give impetus to non-lithium-ion technologies (erstwhile 28 per cent GST) to get a level playing field".
Sen noted that for the Clean Hydrogen ecosystem, Ammonia GST has been reduced from 18 per cent to 5 per cent, and Hydrogen fuel cell vehicles not longer than 4 metres from 12 per cent to 5 per cent.
IESA urges ongoing engagement on this issue to address duty inversion and further support domestic manufacturing. Proposals to reduce GST on EV charging and battery swapping services from 18 per cent to 5 per cent, or to treat them as a supply of electricity, have not been approved.
The Council, following Fitment Committee recommendations, has agreed to clarify the nature of the service, but will maintain current GST rates for now.
Moreover, IESA commended the Council for its forward-looking reforms that lower barriers to entry for alternative battery chemistries and clean energy technologies.
The uniform 18 per cent GST rate is a landmark step, supporting India's strategic goals for long-duration energy storage and domestic innovation, the statement stated.
The industry body calls for continued dialogue to address pending rate reductions on EV parts, battery components, and charging services, ensuring that the tax regime fully supports India's clean energy transition.
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IESA is a premier industry body dedicated to promoting energy storage, e-mobility, and green hydrogen adoption in India. It works with policymakers, industry stakeholders, and research institutions to accelerate market development through policy advocacy, business networking, and thought leadership.
According to a statement, several key recommendations put forth by IESA have been adopted by the GST Council.
"The IESA welcomes the new tax regime under GST 2.0, as it marks a significant step forward in meeting India's future energy storage requirements," it added.
The industry body had recommended that it is critical to encourage innovation across diverse chemistries, such as flow batteries, sodium-ion, metal-air, and other emerging systems.
In a significant policy shift under GST 2.0, the GST Council has heeded this call by streamlining the tax rate for all advanced batteries under heading 8507 to a uniform 18 per cent, replacing the previous regime, where lithium-ion batteries were taxed at 18 per cent and other chemistries were taxed at 28 per cent.
However, it said, a few major recommendations remain pending and are under active consideration.
The request to reduce GST on parts used in the manufacture of electric vehicles from 18 per cent or 28 per cent to 5 per cent remains under review, as the Fitment Committee cited concerns regarding an inverted duty structure.
The council will reconsider this matter after receiving Andhra Pradesh's detailed proposal.
Despite industry requests, the GST rate for cathode coating and separators used in lithium-ion batteries remains at 28 per cent to avoid end-use-based exemptions and classification disputes.
India Energy Storage Alliance (IESA) president Debmalya Sen said, "The GST 2.0 is a welcome move. We are delighted that all batteries, whether lithium-ion or otherwise, have been brought to the 18 per cent GST bracket. We at IESA had been advocating the same for long, this will give impetus to non-lithium-ion technologies (erstwhile 28 per cent GST) to get a level playing field".
Sen noted that for the Clean Hydrogen ecosystem, Ammonia GST has been reduced from 18 per cent to 5 per cent, and Hydrogen fuel cell vehicles not longer than 4 metres from 12 per cent to 5 per cent.
IESA urges ongoing engagement on this issue to address duty inversion and further support domestic manufacturing. Proposals to reduce GST on EV charging and battery swapping services from 18 per cent to 5 per cent, or to treat them as a supply of electricity, have not been approved.
The Council, following Fitment Committee recommendations, has agreed to clarify the nature of the service, but will maintain current GST rates for now.
Moreover, IESA commended the Council for its forward-looking reforms that lower barriers to entry for alternative battery chemistries and clean energy technologies.
The uniform 18 per cent GST rate is a landmark step, supporting India's strategic goals for long-duration energy storage and domestic innovation, the statement stated.
The industry body calls for continued dialogue to address pending rate reductions on EV parts, battery components, and charging services, ensuring that the tax regime fully supports India's clean energy transition.
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