In India, the Goods and Services Tax (GST) has been a significant tax reform, impacting various industries, including the renewable energy sector. When it comes to solar panels, understanding the applicable GST rates and compliance requirements is crucial for businesses and individuals. The GST rate for solar panels and solar modules is 5%, under HSN 8541 — 8541 42 00 for solar cells not assembled in modules or made into panels, and 8541 43 00 for cells assembled in modules or panels — as part of the "renewable energy devices" entry in Schedule I of Notification No. 9/2025-Central Tax (Rate). The 5% rate applies from 22 September 2025; it was 12% from 1 October 2021 to 21 September 2025. HSN 8501, quoted previously on this page, covers electric motors and generators and does not classify solar panels.
Here is a brief overview of the GST rate and HSN code for solar panels:
| HSN Code | Goods/Services | GST Rate (%) | Effective Date |
|---|---|---|---|
| 8541 | Solar cells, whether or not assembled in modules or made up into panels (solar panels and modules) | 5 | 22/09/2025 (12% from 01/10/2021 to 21/09/2025) |
To help you calculate the total GST amount for your solar panel purchases, we have included a calculator widget below. Simply input the base price of the solar panel, and the calculator will display the total GST amount.
function calculateGST() { var basePrice = document.getElementById("base-price").value; var gstRate = 0.05; var gstAmount = basePrice * gstRate; document.getElementById("gst-amount").innerHTML = "Total GST Amount: ₹" + gstAmount.toFixed(2); }The GST tax breakdown for solar panels in India is as follows:
| Tax Component | Rate (%) | Amount (in ₹) |
|---|---|---|
| Central GST (CGST) | 2.5 | 1,250 |
| State GST (SGST) | 2.5 | 1,250 |
| Integrated GST (IGST) | 5 | 2,500 |
Prior to the introduction of GST, the tax regime for solar panels in India was complex, with multiple taxes and cesses applicable. The pre-GST tax regime included:
The GST regime has simplified the tax structure, with a single tax rate of 5% applicable to solar panels.
Here are some frequently asked questions regarding input tax credit and compliance for solar panels in India:
Q: Can I claim input tax credit (ITC) on solar panels?
A: Yes, you can claim ITC on solar panels, as they are eligible for ITC under the GST regime.
Q: How do I claim ITC on solar panels?
A: It depends. Where the panels and inverter are capital goods used for making taxable supplies, input tax credit is generally available — but the position is not free from doubt: some Authority for Advance Ruling decisions treat a rooftop installation as immovable property and deny credit under section 17(5) of the CGST Act, and credit is restricted where the electricity or the use is exempt or non-business. Obtain your own ruling or jurisdictional view before claiming.
To avoid common billing mistakes associated with solar panels, follow these compliance tips:
By following these compliance tips and understanding the GST rates and regulations applicable to solar panels in India, you can ensure seamless and compliant transactions.
5%
8541 (8541 42 00 for solar cells, 8541 43 00 for cells assembled in modules or panels)
No
Yes
Yes
Rate position checked against the CBIC rate notifications (Notification No. 9/2025-Central Tax (Rate) dated 17 September 2025, effective 22 September 2025, and the notifications it supersedes) and the GST Council's 56th meeting recommendations.
