A panel under the Goods and Services Tax (GST) Council, Government of India, has recommended slashing the tax rate on green hydrogen from 18% to 5%. This proposal also includes reducing GST on electrolyzers and energy storage batteries to 5%. The final decision is expected to be made by the GST Council at its next meeting, anticipated in July 2025.
This tax reduction is expected to lower production and distribution costs, making green hydrogen more competitive with fossil fuels and other clean energy alternatives. It supports India’s strategy for energy independence and reduces reliance on imported crude oil, which currently accounts for over 85% of its consumption. By bringing green hydrogen in line with other clean fuels like ethanol and biogas, the government aims to meet the National Green Hydrogen Mission’s target of producing 5 million metric tonnes annually by 2030.
