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New GST Rules Slash Solar Costs

Renewable Energy Announcement

Posted by admin on 2025-09-15 12:01:37 |

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Good news for the renewable energy sector! The GST Council has reduced GST on many renewable energy components from 12% to 5%, effective 22 September 2025. This directly impacts solar modules, inverters, BOS items, and equipment used in renewable energy parks.

Quick Summary

• GST on key solar components: 12% → 5% (from 22 Sept 2025)
• Applies to solar cells/modules, inverters, and other specified renewable energy equipment.
• Target impact: Lower EPC cost, cheaper levelized tariff, faster adoption.
• Action needed: Update quotes/POs, check HS codes, and structure EPC contracts smartly.

 

What Changed

Solar Cells/Modules (PV panels)

• New GST rate: 5% (earlier 12%).
• Includes cells whether or not assembled into modules.

Solar Inverters

• New GST rate: 5% (earlier typically 12%).

Other Renewable Energy Devices

• Wind, biogas, waste-to-energy, tidal/wave equipment—moved to 5% where specified by notification.

EPC/Services Portion

• Services generally remain at 18%. For composite EPC contracts, watch for CBIC clarifications on valuation. Consider separating Supply (Goods @5%) and Services (likely @18%) in contracts to capture the benefit properly.

Effective Date

• 22 September 2025 (Navratri start). Use this date for pricing, invoicing, and contract cutovers.

 

 

Rate Snapshot (for Solar Projects)

Item

Hints/Examples

Likely GST after 22 Sept 2025

Solar cells/modules

HSN 8541-series

5%

Solar inverters

HSN 8504-series

5%

Mounting structures, cables, junction boxes, SCADA, transformers (if covered as RE equipment)

As specified in notifications

5% (where notified)

EPC services / design, installation, commissioning

Service portion

18%

O&M / AMC

Service

18%

 

Go!