There will be a big announcement on biogas in Budget 2025, expected to get exemption in corporate tax

New Delhi: Indian Biogas Association (IBA) has urged the Finance Ministry to provide full corporate tax exemption for compressed biogas (CBG) production in the upcoming Union Budget. IBA says that this will help in attracting investment in the area and the goal of promoting renewable energy sources will be achieved. In a letter to Finance Minister Nirmala Sitharaman earlier this month, the IBA said it would act as an incentive for business sectors willing to invest and scale up CBG production, thereby contributing to clean energy production.

demand for tax exemption

The industry body said it proposes that the government should provide a comprehensive corporate tax exemption for CBG production. In particular, CBG producers should be given 100 percent tax relief in the initial years of operation. Finance Minister Sitharaman will present the Union Budget for the financial year 2025-26 in Parliament on February 1. IBA said that about 100 CBG plants have been commissioned in the country in the financial year 2024-25. The total sales of CBG have been around Rs 1,200 crore. This means that after waiving the tax completely, the government will suffer a revenue loss of about Rs 100 crore. IBA said that this is a short-term loss, but it will help the renewable energy industry to grow in the long term.

You will get many benefits from tax exemption

The letter said that this step will help India achieve renewable energy targets, attract private investment and create employment opportunities. The industry body said the tax exemption in this case will help CBG producers sell their products at competitive prices, thereby increasing the acceptance of CBG in India's energy mix. IBA said that apart from this, the use of agricultural residues like paddy straw and crop waste in the production of biogas will increase. This will eliminate the need to burn agricultural residues, which will ultimately help in reducing pollution. Also read…