- GST on rooftop solar EPC 2026 sits between a 5% concessional and a 12% rate — and it's contested.
- A full EPC is often taxed as a works contract with a deemed 70% goods / 30% service split.
- Modules and cells are commonly classified under HSN 8541; inverters under 8504.
- You can usually claim input tax credit on a taxable supply, but works contracts get tricky.
- The rate and treatment changed around September 2025. Every number here is illustrative.
- Verify the current rate, HSN and valuation against CBIC notifications and your CA.
GST on rooftop solar EPC 2026 is one of the most confusing things you'll price. The rate has moved, the works-contract rules are debated, and a wrong call can quietly eat your margin. This guide lays out the live positions so you and your CA can decide — it is not tax advice.
We've written this for EPC owner-operators and their accountants, not homeowners. Read it as a map of the open questions, then confirm the final numbers with a professional. Tax law on solar has changed more than once, and the safest habit is to verify every figure before you quote.
GST on solar EPC, in short
GST on solar EPC is the indirect tax you charge and pay on a rooftop project, and it depends on how the job is classified. A bare sale of panels is taxed one way. A full design-supply-install contract is usually taxed as a works contract, which blends goods and service into one rate. That classification choice drives almost everything else.
Two questions decide your GST position. First, what rate applies to solar goods right now? Second, is your job a pure supply of goods or a works contract? The answers have shifted with CBIC notifications, so the rest of this page presents the contested positions rather than one fixed rule.
The 5% vs 12% rate debate
The solar GST rate has bounced between a 5% concessional rate and a higher 12% rate, and the correct figure depends on the current CBIC notification. For years, solar devices enjoyed a low 5% rate as renewable-energy goods. Later changes pushed parts of the supply toward 12%, and the works-contract treatment muddied it further.
Why the rate keeps moving
The government uses the rate as a policy lever. A low rate makes solar cheaper for buyers but breaks the input-output chain when your inputs are taxed higher. A higher rate fixes the credit chain but raises sticker price. Each GST Council meeting can shift the balance, which is why you must verify the live rate.
Treat any single rate as illustrative
We will not state one rate as fact. Sources like ClearTax and CBIC have shown different figures at different times. Before you quote a customer, verify the current rate, HSN and valuation against CBIC notifications or your CA. A stale rate on a quotation is a real cash risk.
The 70/30 works-contract split
The 70/30 split is a deemed valuation that treats a solar EPC works contract as 70% supply of goods and 30% supply of service for GST. When a job bundles panels, structure, wiring and labour into one price, the law has historically split the contract value this way and applied rates to each part. This blended treatment is widely cited — and widely contested.
How the split works in practice
Under the deemed split, you don't have to itemise every screw. You apply the goods rate to the 70% portion and the service rate to the 30% portion, then blend them into one effective rate on the full contract. The exact rates applied to each portion are what's debated, so the blended outcome can differ between advisers.
The treatment is contested — verify it
Whether the 70/30 rule still applies, and at what rates, has changed and is argued case by case. Some EPCs and CAs read the current notifications differently. Verify the current 70/30 treatment and its rate against CBIC notifications and your CA before you rely on it for pricing or invoicing.
HSN codes for solar goods
Solar PV modules and cells are commonly classified under HSN 8541, with inverters under 8504 and full EPC works contracts under service code 9954. The HSN code you pick sets the rate, so it matters on every invoice. Misclassifying a module or inverter can lead to the wrong tax and a later dispute.
The common solar HSN headings
Modules and cells usually sit under heading 8541 as photovoltaic devices. Inverters fall under 8504. Mounting structures, cables and pumps each carry their own heading and rate — steel structure under 7308, for example. A works contract uses the service code 9954 rather than a goods HSN.
HSN classification has been revised
The classification of solar goods has been debated and changed over time, and customs and GST treatment don't always line up neatly. Don't assume an old HSN-rate pairing still holds. Verify the current HSN code and matching rate for each line item against CBIC notifications and your CA before filing.
Input tax credit (ITC) on rooftop solar
A solar EPC can generally claim input tax credit on GST paid for goods and services used to make a taxable rooftop supply. ITC lets you offset the tax on your purchases against the tax you collect, so you don't pay tax twice on the same value. The catch is that ITC rules tighten for works contracts and for any output that's exempt.
Where ITC gets complicated
When your output is a taxable supply, the input chain usually flows cleanly and you claim credit on panels, inverters and inputs. But works-contract ITC carries restrictions in GST law, and a low output rate against higher input rates can leave you with stuck credit. A blocked or accumulated credit ties up cash.
Confirm your ITC eligibility
Whether you can claim full ITC depends on your exact contract type, output rate and how you invoice. This is not a place to guess. Verify your specific ITC eligibility with your CA, and keep clean records so any claim survives a later check.
GST rate, HSN and ITC table for solar EPC
The table below maps common solar line items to their typical HSN heading, a contested rate band, and ITC notes. Read every figure as illustrative — the rates and the works-contract treatment changed around September 2025 and remain debated.
Caption: Illustrative only — rates, HSN headings and the 70/30 works-contract split are contested and changed around September 2025. Source: CBIC notifications and ClearTax summaries. Verify the current GST position with your CA before you quote or invoice.
What changed in September 2025
GST on solar saw rate and treatment changes around September 2025, and the works-contract position is still argued in practice. Older guidance you find online may show a rate or split that no longer applies. That gap between published articles and the live notification is exactly why this page flags everything as illustrative.
Because the current rate, HSN and valuation can differ from earlier rules, don't rely on a cached blog post or last year's invoice template. Verify the latest GST on solar against CBIC notifications and confirm your firm's position with your CA. Date-stamp your own pricing sheets so you know when they were last checked — this page was last updated 19 June 2026.
How GST hits your pricing and margin
GST changes your margin when your input rate and output rate don't match. If you buy panels at one rate and bill the customer at a lower blended rate, the gap can become stuck credit that ties up cash. Price the job on the after-tax position, not the sticker rate, or the tax quietly eats your margin.
Show GST cleanly on the quote
Customers compare quotes line by line, so show the goods, the service and the GST clearly. A tidy quotation that states HSN and the tax treatment builds trust and avoids arguments at invoicing. Our customer quotation template shows one clean way to lay it out, and the EPC margin and pricing guide covers how to protect margin after tax.
Segment changes the picture
A residential PM Surya Ghar job and a large C&I rooftop can sit in different tax positions, especially on ITC. The residential vs C&I vs industrial guide explains where the differences show up. Subsidy adds another layer — see how subsidy and tax interact in the subsidy amount and slabs guide.
Common GST mistakes EPCs make
Most GST trouble comes from old assumptions and sloppy records. Avoid these and your filings stay clean.
- Using a stale rate — the rate changed around Sep 2025; re-check before every quote.
- Wrong HSN on the invoice — modules, inverters and structure carry different headings.
- Guessing the 70/30 split — the works-contract treatment is contested; confirm it with your CA.
- Ignoring stuck ITC — a low output rate against higher inputs can trap credit and cash.
- No date-stamp on pricing sheets — you won't know if a number is current.
The fix for all five is the same: verify the current rate, HSN and valuation against CBIC notifications and your CA, and keep your pricing tied to a dated source. Treat GST as a live input to pricing, not a one-time setting.
How SuryaHub helps EPCs handle GST cleanly
SuryaHub doesn't give tax advice, but it helps you apply your CA's GST decision consistently across every job. It builds quotations and invoices that show the GST rate, HSN and the goods-service split in one clean layout, so pricing stays the same from the first quote to the final bill. You set the tax rules once, and SuryaHub applies them job after job. SuryaHub is pre-revenue; real pilots are Suryantra Energy and RGESPL, and every GST figure here is illustrative — verify it with your CA.
Show GST cleanly on every quote
See how SuryaHub builds quotations and invoices with HSN and the tax split.
Related guides
Frequently asked questions
What is the GST rate on rooftop solar EPC in 2026?+
GST on solar devices has sat between a 5% concessional rate and a higher 12% rate, and the position changed in September 2025. The correct rate depends on the current CBIC notification and whether the job is a works contract. Treat every rate here as illustrative and verify the current position with your CA.
What is the 70/30 works-contract split for solar?+
The 70/30 split is a deemed valuation where a solar EPC works contract is treated as 70% supply of goods and 30% supply of service for GST. This treatment is contested and has changed over time, so verify the current 70/30 rule and its rate against CBIC notifications and your CA before you quote.
What is the HSN code for solar panels under GST?+
Solar PV modules and cells are commonly classified under HSN 8541, inverters under 8504, and full EPC works contracts under service code 9954. HSN classification on solar goods has been debated and revised, so verify the current HSN code and matching rate for each item with CBIC notifications and your CA.
Can a solar EPC claim input tax credit on rooftop projects?+
A solar EPC can generally claim input tax credit on GST paid for goods and services used in a taxable rooftop supply, subject to GST law conditions. Input tax credit on rooftop solar gets complex for works contracts and exempt outputs, so verify your specific ITC eligibility with your CA.
Did GST on solar change in September 2025?+
GST on solar saw rate and treatment changes around September 2025, and the works-contract position remains contested in practice. Because the current rate, HSN and valuation can differ from older guidance, verify the latest GST on solar against CBIC notifications and confirm your position with your CA.
How does SuryaHub help EPCs with GST on solar?+
SuryaHub helps EPCs build quotations and invoices that show GST, HSN and the goods-service split cleanly, so pricing stays consistent across jobs. SuryaHub does not give tax advice and is pre-revenue, with real pilots at Suryantra Energy and RGESPL; verify every GST figure with your CA.
Sources & references
Rate, HSN and works-contract details should always be checked against primary GST sources. ClearTax summaries are useful context, but CBIC notifications are the authority — and your CA confirms how they apply to your firm.
- CBIC (Central Board of Indirect Taxes & Customs) ↗
Official GST notifications, rate schedules and HSN classification for solar goods and services.
- National Portal for PM Surya Ghar ↗
Scheme rules, benchmark cost and the subsidy process that sits alongside GST.
- Ministry of New & Renewable Energy (MNRE) ↗
Solar device definitions and policy context for renewable energy goods.
Written by the SuryaHub team · reviewed against CBIC notifications & ClearTax summaries · updated 19 June 2026.
Method: Rates, HSN headings and the 70/30 works-contract split are taken from CBIC and ClearTax and re-checked every 30 days. All GST figures are illustrative and were contested or changed around September 2025 — verify the current GST position with your CA. This is not tax advice. SuryaHub is pre-revenue; only Suryantra Energy and RGESPL are real pilots.
Change log: 19 Jun 2026 — first published.