GST on coal likely to rise: What it means
Heads up: The GST Council is meeting in early September 2025 and might raise the tax on coal from 5% to 18%. If this goes through, expect electricity bills to climb by about 5-6 paise per unit.
On the bright side, there's talk of cutting GST on renewables like windmills and solar generators from 12% to 5%, making green energy a bit more affordable.
Why the hike is concerning
Coal powers most of India's electricity, so a higher coal tax means power companies will pay more—potentially bumping up their costs by around 15 paise per unit.
Since utilities can't claim tax credits on electricity (it's exempt from GST), these extra costs usually get passed down the line.
Political factors might delay direct hikes for consumers at first, but eventually, higher prices could show up in your monthly bill.
According to sources, the move is aimed at closing revenue gaps while encouraging a shift toward cleaner energy sources.