GST on Solar Panels in India (2026): Rate, HSN & Installation

Solar panels, cells and modules are taxed at a concessional 5% as renewable-energy devices, while installation as a works contract has its own treatment. Here's the 2026 rate and HSN guide for solar dealers and EPCs.

Part of: The Complete GST Guide for Small Business in India (2026)

Solar gets a concessional GST as a renewable-energy device: panels, cells and modules are taxed at 5%. Installation, which combines goods and services, is treated as a works contract with its own rule. Here's the component-wise picture for solar dealers and EPC contractors.

Quick answer: solar panels/cells/modules are 5% GST (renewable-energy devices). Component rates and the installation (works-contract) rule vary — see below.

Solar GST at a glance

The installation (works-contract) rule

When a solar plant is supplied and installed together, it's a works contract combining goods (panels, structure) and service (installation). A specified valuation split applies so the overall effective rate stays concessional. Because component classification and the works-contract split can be nuanced, solar EPCs should confirm the exact treatment for a given project with their CA.

FAQs

Can a business claim ITC on a rooftop solar plant?

ITC on plant and machinery used for business is generally available, but solar on an owned building can attract the immovable-property ITC restriction — the answer depends on the setup, so confirm with your CA.

General information only, not tax advice; component classification and rates can be nuanced and revised. Confirm the current rate, HSN and works-contract treatment on CBIC notifications or with your CA. Last reviewed: September 2026.

Bill solar projects with KukBook

KukBook handles component-wise GST, works-contract billing, project/site ledgers and GST returns — useful for solar dealers and EPC contractors.