The Indian Biogas Association (IBA) has urged the country's finance ministry to create blanket corporate tax holidays for compressed biogas (CBG) production in the forthcoming General Budget to attract investment in the sector.
IBA wrote to Finance Minister Nirmala Sitharaman to state that the tax holidays would act as an incentive for businesses that are willing to invest in scaling up CBG production.
"It is proposed that the government create blanket corporate tax holidays for CBG production. In particular, a complete tax waiver should be introduced for CBG producers, which provides tax relief in the initial years of operation," the industry body said.
The finance minister is slated to present the Budget to India's Parliament on February 1.
It highlighted that, in the 2024-25 financial year, India's 100 functional commercial CBG plants that were at full capacity, brought total CBG sales of around Rs 1,200 crore.
So, with a complete tax waiver, the government would be looking at an estimated Rs 100 crore in tax receipts, said IBA.
However, this would help the renewable energy industry flourish longer-term. According to IBA, it would help India meet its renewable energy goals, draw in private investment and generate new employment.
CBG providers would be able to offer their products at competitive prices, which in turn would boost the adoption of CBG in India's energy mix, said the trade body.
