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@article{207923,
        author = {P. Munni and Dr. S. K. Bhogal},
        title = {IMPACT OF GST ON CAPITAL STRUCTURE AND INVESTMENT DECISIONS OF LISTED RENEWABLE ENERGY FIRMS IN INDIA},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {13},
        number = {3},
        pages = {3398-3409},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=207923},
        abstract = {GST brought an end to the complex, confusing and disjointed indirect-tax regime in India where taxes such as excise duty, value-added tax (VAT), central sales tax and various cesses were charged based on the origin of goods. Renewable energy equipment – solar photovoltaic modules, wind turbines, inverters and balance-of-system (BOS) equipment – has been a policy-sensitive category, with a concessional 5% rate in the period from July 2017 to September 2021; 12% from October 2021 to September 2025; and 5% from 22nd of September 2025 onwards. This paper investigates if there has been any statistical linkage between these sequential changes in the statutory GST rate on renewable energy capital equipment, and the investment decisions (measured in capital expenditure intensity) and capital structure (measured in debt-equity ratio) of listed renewable energy companies in India. The study utilizes descriptive statistics, paired-sample t-tests over the different phases of GST and pooled OLS regression with firm fixed effects and robust standard errors with a firm-year panel of eight coded, representative listed renewable energy firms for FY 2014-15 to FY 2023-24. The results show that during the period of transition from pre-GST cascading-tax regime to the concessional 5 percent GST phase, the average debt-equity ratio (DER) decreased statistically significantly, while capital expenditure intensity (CEOI) and return on assets (ROA) increased statistically significantly, which is indicative of a reduction in the effective cost of capital and increased input tax credit (ITC) availability. By contrast, the 12 per cent rate increase in October 2021 is related to a partial unwinding, where leverage increases and the capex intensity slows down. The result of regression shows that, the effective indirect-tax burden is positively associated with debt-equity ratio and the effective tax burden is negatively associated with capex intensity while controlling for profitability and firm size. The paper ends with the policy implications that go into sustaining the applicable rate of the GST on renewable energy and highlights future research avenues with the addition of audited firm level information and a bigger sample size.},
        keywords = {Goods and Services Tax (GST); Capital Structure; Debt-Equity Ratio; Capital Expenditure; Investment Decisions; Renewable Energy; India},
        month = {August},
        }