Power ministry may recommend GST cut on hydro project components

Rituraj Baruah, Subhash Narayan

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The union ministry of power is likely to ask for a cut in the goods and services tax on components used in hydropower projects.

The ministry may seek a cut in components like turbines, steel and cement which are in the higher slabs, two people aware of the matter said.

The suggestions were discussed in a recent meeting at the ministry and may be taken up with the finance ministry, they said. The Central Electricity Authority (CEA) also has put up a case for a GST cut.

“As the levy on the components is at 18% or above, the need is that the levies should at least be below the 18% slab. The recommendation to the finance ministry would be for bringing these items in the 5% slab as suggested by the stakeholders," said one of the two people mentioned above.

While on turbine and steel, GST stands at 18%, that on cement is at the highest slab of 28%.