- Solar modules and cells usually sit under HSN 8541 in a lower GST slab (indicative — verify).
- A solar EPC contract is often split 70:30 between goods and service.
- Inverters (8504), batteries (8507), mounting and cables can each carry a different rate — do not assume the module rate.
- The 22 September 2025 revision moved several rates; older quotes may be wrong.
- Rates change — confirm with a CA or the current CBIC notification before you bill any line.
GST on solar panels in India in 2026 is not one flat number. The rate depends on the HSN code of each BOM line, whether you bill a loose panel or a full system, and how a solar EPC contract is split between goods and service. This guide gives you indicative HSN codes and rates for every BOM item — but every figure here is point-in-time. Confirm each one with a chartered accountant or the current CBIC-GST notification before you raise an invoice.
What GST rate applies to solar modules in 2026?
Solar modules sit in a lower GST slab in 2026, but the exact rate changed with the September 2025 revision and is read differently for a loose panel versus a full system. We are not stating a single rate here on purpose, because the number is contested and gets revised. Confirm the current rate with a CA or the live CBIC-GST notification.
Why we will not quote a fixed number
GST rates on solar goods have moved more than once. A rate that was right last year may be wrong today. If a vendor or template quotes you a "settled" solar GST rate, treat it as a starting point, not gospel. The safe habit is to check the current CBIC notification on the day you bill.
Loose panel versus a full system
A single panel sold as goods and a complete solar power system can be classified and taxed differently. Some buyers also bundle the panel with other parts, which changes the picture again. Always match the rate to what you are actually selling on that invoice line.
What are the HSN codes for a solar BOM?
Each item in a solar BOM has its own HSN code, and they are not all in the solar slab. Modules and cells usually fall under HSN 8541, inverters under 8504, and batteries under 8507. Mounting steel, cables and connectors are taxed as general goods. The table below is indicative only — confirm each code with a CA or the current CBIC notification.
Table: indicative HSN codes and GST rate slabs for a solar BOM. Rates and slabs are point-in-time and change. Source: classification practice based on CBIC-GST schedules — confirm every line with a CA or the current CBIC notification before you bill.
What changed in the September 2025 GST revision?
The 22 September 2025 GST revision moved several rates that touch a solar BOM, so quotes and templates built before that date may be wrong. The change was announced through the GST Council and put into effect by CBIC notifications. Read the exact effect on each HSN line from the current CBIC notification, not from memory.
Why old quotes break
When a rate moves, every saved quote and price list that used the old number is now off. Finance teams that copy last quarter's GST line into a new invoice can under-charge or over-charge tax. After any revision, re-check each rate against the current CBIC notification before you reuse a price.
Treat the date, not just the rate, as a checkpoint
A rate is only correct for the period it applies to. An invoice raised before a change and one raised after may carry different GST on the same item. Note the effective date on every revision so you bill the right rate for the right supply date.
How is GST charged on a solar EPC contract (the 70:30 rule)?
A solar EPC contract is commonly split 70:30 between goods and service, so the goods part is taxed at the goods rate and the service part at the works-contract rate. This split is a practice that has been litigated and revised, so do not treat the 70:30 ratio or its rates as fixed. Confirm the current treatment with a CA or the live CBIC-GST notification.
What the split means on your invoice
Under the 70:30 reading, about 70 percent of the contract value is the supply of solar goods, and about 30 percent is the EPC service. Each part can carry its own GST rate. The blended rate on the whole contract then depends on both rates and on the split actually allowed.
The split itself is contested
Tax authorities and courts have not always agreed on whether a solar plant is a single composite supply or two supplies, and what ratio applies. Because the answer affects your tax, get a written position from a CA for your contract type. Do not copy a ratio from another firm's deal.
Is it goods, services, or a works contract?
A solar EPC project can be read as a supply of goods, a supply of service, or a works contract, and the reading changes the GST. When you supply and install a plant fixed to the ground or roof, it often looks like a works contract under HSN 9954. The exact classification is contested — confirm it with a CA or the current CBIC notification.
Why classification matters so much
The label decides the rate, the HSN, and how input tax credit works. A pure goods sale, a composite supply, and a works contract are not taxed the same way. Getting the label wrong can mean a notice later, so it is worth settling before you sign the contract, not after.
Composite supply versus works contract
A composite supply bundles goods and service that go together, taxed at the rate of the main supply. A works contract is a defined category for immovable property work. Solar plants have been argued both ways. Your CA should map your specific scope to the right category in writing.
What GST applies to inverters and batteries?
Inverters and batteries can each carry a different GST rate from the solar module, so do not assume the panel rate covers them. An inverter usually sits under HSN 8504 and a battery under 8507. The inverter rate has shifted, and a battery is often in a higher slab. Confirm both with a CA or the current CBIC notification.
Inverters: string, hybrid, and storage
A plain string inverter and a hybrid or storage inverter can be read differently for GST. The line between a "solar inverter" rate and a general inverter rate has caused disputes. When you quote a hybrid or storage unit, check its classification rather than reusing the plain inverter line.
Batteries and storage often sit higher
Battery storage is frequently taxed in a higher slab than the solar module, which surprises buyers comparing quotes. If you add storage to a job, price the GST on the battery line on its own. Confirm the current battery rate with a CA before you commit a number.
Can EPCs claim input tax credit (ITC)?
EPCs can usually claim input tax credit on GST paid for goods and services used to make a taxable supply, subject to the normal blocked-credit and matching rules. ITC on works contracts and on plant fixed to property has special conditions. Confirm what you can claim with a CA and the current CBIC-GST rules.
Where ITC gets blocked
GST law blocks credit in certain cases, and works contracts for immovable property are a known grey area. Whether you can claim credit on a fixed solar plant depends on the facts and the current rules. Do not assume full credit on every input — check each major line with your CA.
Match your inputs and outputs
Clean ITC depends on supplier invoices matching what shows in your GST returns. Missing or mismatched supplier filings can hold up your credit. Keep every purchase invoice tied to the job and reconcile it, so your claim is not stuck when you need the cash.
Does DCR or ALMM status change the GST?
DCR or ALMM status does not change the GST rate by itself, because GST follows the goods and their HSN, not where a module is listed or made. A DCR module and a non-DCR module of the same type carry the same indicative rate. Still, confirm the rate with a CA or the current CBIC notification, since rates move.
ALMM listing and DCR certification answer a different question: whether a module is allowed in a scheme or counts as domestic content. They sit alongside GST, not inside it. For how those rules shape your purchase, see the ALMM & DCR compliance hub and the guide on building a compliant BOM.
How does GST interact with the subsidy?
GST is charged on the project value, while a government subsidy reduces what the customer finally pays — the two work on different parts of the deal. How the subsidy and GST line up on an invoice depends on the scheme rules and the current MNRE guidance. Confirm the billing method with a CA and the scheme guidelines.
Bill the tax, then apply the subsidy
In most schemes you invoice the job with GST as normal, and the subsidy flows to the customer under the scheme. Do not net the subsidy off before charging GST unless the rules clearly allow it. Getting this order wrong can short your tax and trigger a query later.
Keep scheme and tax records separate
Subsidy paperwork and GST records serve two different audits. Keep the scheme claim, the GST invoice, and the HSN line each clean and traceable to the job. Clear records make both a subsidy check and a GST check faster and safer.
Common GST mistakes EPCs make on solar BOM
Most GST trouble on solar jobs comes from reusing an old rate or applying one rate to the whole BOM. Avoid the common slips below and your invoices hold up.
- One rate for everything — applying the module rate to the inverter, battery, mounting and cables. Each can sit in a different slab.
- Stale rates — copying a GST line from a pre-September-2025 quote after the rate moved.
- Wrong HSN — using the module HSN for a battery or mounting structure, which can draw a classification query.
- Ignoring the 70:30 split — billing a full EPC contract as one goods supply when a works-contract reading applies.
- Netting subsidy before GST — charging GST on the post-subsidy amount when the rules require the full value.
- Assuming DCR changes the rate — treating a DCR module as a different GST line from a like non-DCR module.
Each of these is point-in-time and contested in places. Before you bill, confirm the rate, the HSN and the contract treatment with a CA or the current CBIC-GST notification.
How SuryaHub helps EPC finance teams
SuryaHub keeps the GST and HSN line for every BOM item attached to the job, so your team quotes and bills from one place instead of a stale spreadsheet. The finance & GST module holds the HSN and rate per item, and the quotation tool carries those lines from quote to invoice — so a rate change updates in one place, not across many old files. You still set and verify the rates with your CA; SuryaHub keeps them consistent across jobs. SuryaHub is pre-revenue; the only real pilots are Suryantra Energy and RGESPL.
Keep GST consistent across every quote
See how SuryaHub holds the HSN and rate per BOM item from quote to invoice.
Related guides
Frequently asked questions
What GST rate applies to solar panels in India in 2026?+
Solar panels in India sit in a lower GST slab in 2026, but the exact rate moved with the September 2025 revision and is read differently for a loose panel versus a full system. Treat any rate as point-in-time. Confirm with a CA or the current CBIC-GST notification before you bill.
What is the HSN code for a solar module?+
A solar module or cell is usually classified under HSN 8541, while an inverter falls under 8504 and a battery under 8507. These codes are indicative, and classification disputes happen. Confirm the correct HSN for each BOM line with a CA or the current CBIC notification before you file.
How is GST charged on a solar EPC contract?+
A solar EPC contract is often split 70:30 between goods and service, so the goods part and the works-contract service part are taxed at their own rates. This split and its rates are contested and have changed. Confirm the current treatment with a CA or the current CBIC-GST notification.
Can solar EPCs claim input tax credit?+
Solar EPCs can usually claim input tax credit on GST paid for goods and services used in a taxable supply, subject to the normal blocked-credit and matching rules. ITC on works contracts and on plant has special conditions. Confirm what you can claim with a CA and the current CBIC-GST rules.
Does DCR or ALMM status change the GST rate?+
DCR or ALMM status does not change the GST rate by itself, because GST follows the goods and the HSN, not where a module is listed or made. A DCR module and a non-DCR module of the same type carry the same rate. Confirm the rate with a CA or the current CBIC notification.
What is the HSN code for a solar inverter?+
A solar inverter is usually classified under HSN 8504, but its GST rate has shifted and a hybrid or storage inverter may be read differently from a plain string inverter. Treat the code and rate as indicative. Confirm the inverter HSN and rate with a CA or the current CBIC notification.
Sources & references
Rates, HSN codes and the works-contract treatment come from primary tax sources. Every figure on this page is point-in-time. Always confirm the current rate and classification with a chartered accountant and the live CBIC-GST notification before you bill.
- Central Board of Indirect Taxes & Customs (CBIC) ↗
GST rate and HSN notifications, and customs duty on solar goods. Verify current.
- GST Council ↗
Rate decisions, including the changes announced for September 2025. Verify current.
- Ministry of New & Renewable Energy (MNRE) ↗
Scheme rules and how subsidy interacts with project cost. Verify current.
Written by the SuryaHub team · reviewed against CBIC, GST Council & MNRE sources · updated 20 June 2026.
Method: HSN codes and rate slabs reflect CBIC-GST classification practice and are re-checked against the current notification. Every rate and date is point-in-time and may change. This is general information, not tax advice — confirm with a CA. SuryaHub is pre-revenue; only Suryantra Energy and RGESPL are real pilots.
Change log: 20 Jun 2026 — first published.