GST Rationalisation To Accelerate India's Green Transition
WATER & WASTE

GST Rationalisation To Accelerate India's Green Transition

Recent goods and services tax rationalisation aims to accelerate sustainable manufacturing, strengthen waste treatment infrastructure and expand sustainable mobility across India under Prime Minister Narendra Modi. The changes align with the Viksit Bharat 2047 agenda, the Lifestyle for Environment (LiFE) movement and the country’s Net Zero 2070 ambition while reinforcing Paris Agreement commitments. The reforms seek to make eco-friendly products and services more accessible and affordable for both industry and consumers.

Common Effluent Treatment Plants (CETPs) offering collective wastewater services saw GST fall from 12 per cent to five per cent to incentivise shared treatment and lower costs for small and medium sized enterprises. 222 operational CETPs treat 2212 million litres per day (MLD) of industrial wastewater across 21 states, and the tax change is estimated to save industry about Rs 132.7 mn a day. The measure also supports 53 CETPs implementing Zero Liquid Discharge (ZLD) systems and promotes reuse of treated water.

GST on biodegradable carry bags has been cut from 18 per cent to five per cent to strengthen the ban on identified single use plastics and improve affordability. The typical sale price is expected to fall from Rs 200/kg to Rs 178/kg, a decline of approximately 11 per cent, making compostable materials more competitive. The move is intended to help over 200 certified manufacturers scale up production and to reduce plastic leakage into rivers and oceans.

Green mobility measures cut GST on buses and commercial goods vehicles from 28 per cent to 18 per cent to encourage fleet modernisation and cleaner transport. Lower upfront costs are intended to spur replacement of older vehicles with Bharat Stage VI compliant models that are up to 10 times cleaner than earlier standards and to enable wider public transport deployment. Reduced tax on goods vehicles is expected to lower logistics costs, expand market access and contribute to emissions reductions and improved air quality.

Recent goods and services tax rationalisation aims to accelerate sustainable manufacturing, strengthen waste treatment infrastructure and expand sustainable mobility across India under Prime Minister Narendra Modi. The changes align with the Viksit Bharat 2047 agenda, the Lifestyle for Environment (LiFE) movement and the country’s Net Zero 2070 ambition while reinforcing Paris Agreement commitments. The reforms seek to make eco-friendly products and services more accessible and affordable for both industry and consumers. Common Effluent Treatment Plants (CETPs) offering collective wastewater services saw GST fall from 12 per cent to five per cent to incentivise shared treatment and lower costs for small and medium sized enterprises. 222 operational CETPs treat 2212 million litres per day (MLD) of industrial wastewater across 21 states, and the tax change is estimated to save industry about Rs 132.7 mn a day. The measure also supports 53 CETPs implementing Zero Liquid Discharge (ZLD) systems and promotes reuse of treated water. GST on biodegradable carry bags has been cut from 18 per cent to five per cent to strengthen the ban on identified single use plastics and improve affordability. The typical sale price is expected to fall from Rs 200/kg to Rs 178/kg, a decline of approximately 11 per cent, making compostable materials more competitive. The move is intended to help over 200 certified manufacturers scale up production and to reduce plastic leakage into rivers and oceans. Green mobility measures cut GST on buses and commercial goods vehicles from 28 per cent to 18 per cent to encourage fleet modernisation and cleaner transport. Lower upfront costs are intended to spur replacement of older vehicles with Bharat Stage VI compliant models that are up to 10 times cleaner than earlier standards and to enable wider public transport deployment. Reduced tax on goods vehicles is expected to lower logistics costs, expand market access and contribute to emissions reductions and improved air quality.

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