Fitment committee clears slashing GST on green Hydrogen to 5% from 18%

A panel mandated to examine tax rates under the Goods and Services Council has recommended slashing tax on green hydrogen to 5% from 18% now, said people familiar with the matter.

The fitment committee has also backed reducing the goods and services tax (GST) on storage batteries and green hydrogen electrolysers, an important component for producing green hydrogen, to 5%.

The recommendations will be placed before the GST Council at its next meeting, which is likely to be held in July, for a final call on the tax rates.


Industry had been pushing for the rate cuts and had reached out to the government on the issue. It maintains that the tax reduction can make green hydrogen and energy storage solutions more affordable, promoting their adoption and contributing to India's clean energy goals.

The India-EU Clean Energy and Climate Partnership supports joint projects and research and green hydrogen imports are also part of it. As the final contours of the agreement are being worked out, India is preparing the domestic industry to manufacture green hydrogen in view of the large European market.

In January 2023, India launched the National Green Hydrogen Mission, a flagship programme aimed at reducing import dependence, enhancing energy self-sufficiency and accelerating the decarbonisation of energy-intensive industries in alignment with the government’s Atmanirbhar Bharat vision.

The Centre had announced an outlay of Rs 19,744 crore for the programme, under which it is targeting production of 5 million tonnes of green hydrogen by the end of 2030.