As the government looks to bring electricity under goods and services tax (GST), the Union power ministry is looking at its likely impact on the industry, states’ revenue and household electricity bills. GST is expected to make electricity cheaper for industry because it will be able to get input tax credit. Such embedded tax on the electricity price, leads to further ‘tax on tax’ on the manufacturing sector. At present, they are not able to use input tax credits since there is no GST on electricity. Coal-based power projects will be able to benefit from the broad-basing of GST more than clean energy and hydro power projects.

Source: Mint December 25, 2023 16:54 UTC