By Mr. Vineet Mittal, Chairman, Avaada Group .
“As India advances towards its clean energy, manufacturing and green fuels ambitions, the Union Budget 2026–27 is a critical opportunity to remove structural cost distortions and create long-term investment certainty. On direct taxes, we strongly advocate zero income tax on dividends from renewable energy SPVs to their holding companies to enable efficient capital recycling and lower tariffs. Equally important is providing clarity that income earned during the construction period should be treated as capital receipt and reduced from project cost, which will significantly reduce litigation and improve ease of doing business.
On indirect taxes, energy storage must be recognised as a core power asset. While electricity is GST-exempt, BESS and pumped storage services attract 18% GST with no ITC benefit. Reducing GST on storage charges to NIL will directly lower the cost of renewable power. We also seek zero BCD and IGST for at least five years on capital equipment for manufacturing solar glass, ingots, wafers, cells, modules, batteries and advanced TOPCon and HJT technologies, where imported equipment currently inflates project costs by 20–30%.
From a policy and regulatory perspective, stronger enforcement of Renewable Consumption Obligations (RCO) is essential to boost demand and investment certainty. For distributed energy, easy financing options for rooftop solar similar to retail consumer electronics financing and extension of the KUSUM scheme CFA sunset from March 2026 to March 2027, along with timely CFA disbursement and VGF support, are critical to address on-ground execution challenges. We also request rationalisation of project finance norms, including reducing the 75% land acquisition requirement to 50% or less, and waiver of refinancing prepayment premiums.
Collectively, these measures can move India from clean-energy deployment to clean-tech leadership and position the country as a global clean energy manufacturing hub.”
