GST 2.0 to boost defence, renewables, solar sectors
Japan-based broking firm Nomura says in a report
image for illustrative purpose
New Delhi: India's capital goods-related segments, such as defence, renewable and industrial machinery, could hugely benefit from the revision of the Goods and Services Tax (GST) structure, a report has said. The current four-tier GST system will give way to a two-rate structure of five per cent and 18 per cent, from September 22, 2025, Japan-based broking firm Nomura said in a report. Defence procurement and indigenous manufacturing, highly sensitive to indirect tax structures, will benefit from revisions to GST rates, significantly reducing the tax burden on critical equipment, components, and subsystems, according to the broking house. High-value imports and critical spares being exempted from IGST will significantly improve budget efficiency, it said. The government has also slashed GST to five per cent for several high-tech Defence imports, including drones, providing long-term savings on lifecycle equipment expenses.
The internal rates of return from renewable energy projects will benefit as GST on their critical inputs and equipment moves from a 12 per cent slab to a five per cent slab, Nomura said.
