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Despite GST, Biogas Units to Make Significant Impact on Waste Disposal


July 20th,2017 Leave Comment



Waste disposal and garbage management has in the last few years been exempted from taxation of any kind, with subsidies promoted in the hope that more people will be open to biogas production and usage. There was support and incentives available to promote this sector in the form of exemption from excise duty of biogas, its production and use.

The Goods and Services Tax (GST) is a tax reform initiative introduced by the government of India on July 1st, 2017 the aim of which was to replace all kinds of regional and state tax, substituting it with an indirect all-encompassing tax. The rates for almost all kinds of goods and services have changed owning to GST. This move has been done with the right intention, but adversely affects the biogas sector significantly especially since the use of biogas and waste disposal is the need of the hour.

As per the new GST regulation, there has been a tax rate increase from 0 % to 5 % for biogas and 5 % to 12% for composting machine. This is considerable since biogas and its usage through upgradation to piped gas, biomethane, electricity and heat generation was excise duty exempted. Biogas was also previously provided complete exemption or concessional vat rates across some states up to 5%.

With proper disposal of waste seen as a huge problem across cities, the lack of a well managed sewage management system in cities and improper or incomplete segregation and recycling of wet and dry waste, it is important to ensure as much as possible is done for the sector.

The limited resources of non-renewable energy, necessitates the need for renewable sources of energy to be used for domestic and commercial purposes and Biogas is a significant source of this energy.biogas is clean, gaseous, produces minimal GHG emission, and has slurry as a by-product which can be used as organic fertilizer for growing vegetables and fruits. Biogas also minimises pollution, and is also a source of large scale employment.

Upon complying with GST norms, the rates of the units and their components have increased. It is therefore important that despite the rise in pricing and GST implementation, to ensure that biogas units continue to be installed for its primary value that supercedes everything else – that of minimizing the use of renewable energy source and replacing it with a clean, non-pollutant gas that will positively impact the environment.