NEW DELHI — In a major push for sustainability, the Government of India has announced strategic GST rate cuts across waste management, biodegradable products, and green mobility. These reforms, aligned with the ‘Viksit Bharat 2047’ vision and the LiFE (Lifestyle for Environment) movement, aim to make eco-friendly solutions more affordable for businesses and consumers alike.
The changes are designed to support India’s Net Zero 2070 ambition by lowering the financial barriers to adopting green technologies and infrastructure.
Strengthening Waste Management
The tax on services provided by Common Effluent Treatment Plants (CETPs) has been slashed from 12% to 5%.
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MSME Support: Lower taxes make collective industrial waste treatment more viable for small and medium enterprises.
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Economic Impact: With over 222 operational CETPs treating 2,212 million litres of wastewater daily, the reduction is estimated to save industries approximately ₹13.27 crore per day.
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Water Conservation: The move incentivizes the transition toward Zero Liquid Discharge (ZLD) systems, promoting the reuse of treated water.
Combating Plastic Pollution
To reinforce the national ban on single-use plastics, the GST on biodegradable bags has been significantly reduced from 18% to 5%.
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Price Drop: The retail price of compostable carry bags is expected to fall by roughly 11% (from ₹200/kg to ₹178/kg).
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Market Competitiveness: Lower costs will allow eco-friendly alternatives to compete more effectively with conventional plastics.
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Manufacturing Boost: The reform encourages over 200 certified compostable manufacturers to scale up production.
Advancing Green Mobility
The government has also reduced the GST on buses and commercial goods vehicles from 28% to 18% to modernize India’s transport fleet.
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Cleaner Air: Lower upfront costs encourage operators to replace older vehicles with BS-VI compliant models, which are up to 10 times cleaner than older standards.
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Public Transit: The tax cut enables both government and private operators to deploy more buses, enhancing last-mile connectivity.
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Logistics Efficiency: Reduced taxes on goods vehicles will lower overall transportation costs and the carbon footprint of the logistics sector.

