DAE seeks tax relief and green status for nuclear power at par with renewables

The Department of Atomic Energy (DAE) has requested that the Ministry of Finance extend tax incentives and green policy benefits to the nuclear power sector, aiming to align it with renewable energy support frameworks. The proposal has been submitted as part of the ongoing budget preparation exercise, according to people familiar with the development.

The DAE has sought a waiver of Goods and Services Tax (GST) for ongoing and upcoming nuclear power projects. It has also asked for access to green financing, eligibility under Renewable Purchase Obligations (RPOs), inclusion of nuclear power in the national green taxonomy, and removal of nuclear projects from the Central Pollution Control Board (CPCB) Red category.

Currently, nuclear power does not receive the same level of fiscal and policy support as solar, wind, and hydropower. Renewable projects benefit from lower-cost financing linked to their green classification, while nuclear projects face a higher environmental risk category and an 18 per cent GST rate, compared to an average 8.9 per cent applicable to renewables. The DAE has argued that although nuclear plants have low operational carbon emissions, the current framework treats them differently.

In the regulatory context, the recently enacted Shanti Bill, 2025, aims to facilitate private participation in the nuclear sector. Earlier, nuclear projects benefited from excise duty exemptions before the introduction of GST, but those benefits are no longer available. Customs duty exemptions remain in place until September 30, 2027, subject to specified conditions.

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