Direct answer: Since 22 September 2025, solar panels, cells and solar power generating systems carry 5% GST, down from 12%. A turnkey rooftop solar contract, where one installer supplies and installs everything, is taxed with the 70:30 rule: 70% of the value at 5% and 30% at 18%, an effective 8.9% instead of the old 13.8%. MNRE estimated that a typical 3 kW home system became about ₹9,000 to ₹10,500 cheaper. Call / WhatsApp +91 7975009078
GST on rooftop solar at a glance
| Item | Before 22 Sep 2025 | From 22 Sep 2025 |
|---|---|---|
| Solar panels and PV cells | 12% | 5% |
| Solar power generating systems and parts for their manufacture | 12% | 5% |
| Turnkey supply and installation, goods portion (70%) | 12% | 5% |
| Turnkey supply and installation, services portion (30%) | 18% | 18% |
| Effective rate on a turnkey contract | 13.8% | 8.9% |
How the 70:30 rule works on a quote
Here is the arithmetic on an illustrative ₹2,00,000 turnkey contract before tax. It is an example, not an Eltron price.
- Goods share (70%): ₹1,40,000 at 5% = ₹7,000 GST (it was ₹16,800 at 12%)
- Services share (30%): ₹60,000 at 18% = ₹10,800 GST (unchanged)
- Total GST: ₹17,800, or 8.9% of the contract (it was ₹27,600, or 13.8%)
Apply the same 8.9% to your own quote. For current Bangalore system prices by size, see our rooftop solar cost guide and the 5 kW price breakdown.
GST and the PM Surya Ghar subsidy
The subsidy is a fixed amount, not a percentage of your bill: ₹30,000 per kW for the first 2 kW and ₹18,000 for the third kW, capped at ₹78,000. It is credited after BESCOM or GESCOM inspects your system. You pay GST on the invoice; the subsidy is then paid on top of that saving. Both need DCR panels for subsidy homes, explained in DCR vs non-DCR solar panels. Mind the PM Surya Ghar last date.
For shops, offices and factories
Businesses pay the same rates. A GST-registered business may be able to claim input tax credit on the GST it pays, which can make the effective tax cost close to zero, but rooftop plants have drawn mixed advance rulings on whether they count as plant and machinery or as part of the building. Confirm with your chartered accountant before you rely on it. See commercial rooftop solar in Karnataka.
How to check the GST on your quote
- The invoice shows the 70:30 split, or separate lines for goods at 5% and services at 18%
- CGST and SGST appear for a Karnataka installer billing a Karnataka address, not IGST
- The installer’s GSTIN is printed and valid on the GST portal
- The effective GST on a turnkey contract is close to 8.9%, not 12%, 13.8% or 18% on the whole amount
- The quote names the panel make, model and DCR status
Get a clear, itemised quote
Eltron’s quotes show the system size, equipment, GST and expected subsidy line by line, with 5 years of free maintenance included.
Call / WhatsApp +91 7975009078 | Contact Eltron Energy
FAQ: GST on solar panels
What is the GST rate on solar panels in 2026?
5%. Solar panels, photovoltaic cells and solar power generating systems moved from 12% to 5% GST from 22 September 2025, under Notification No. 9/2025-Central Tax (Rate) dated 17 September 2025. That is 2.5% CGST plus 2.5% SGST on an intra-state Karnataka invoice.
What is the GST on rooftop solar installation?
When panels, inverter and installation are sold together as one turnkey contract, GST rules treat 70% of the contract value as goods at 5% and 30% as services at 18%. The effective rate on the whole contract works out to 8.9%, down from 13.8% before 22 September 2025.
How much cheaper did a 3 kW rooftop system get after the GST cut?
MNRE said a typical 3 kW rooftop system would become cheaper by about ₹9,000 to ₹10,500. Your exact saving depends on the contract value.
Is GST charged on the PM Surya Ghar subsidy?
The subsidy is a fixed amount per kW (₹30,000 per kW for the first 2 kW and ₹18,000 for the third, capped at ₹78,000) credited to your bank account after DISCOM inspection. You pay GST on the invoice value of the system; the subsidy does not change the GST rate.
Can a business claim input tax credit on GST paid for rooftop solar?
Often yes, if the business is GST-registered and the plant is used for business, but rooftop plants have drawn mixed advance rulings on whether they count as plant and machinery or as part of the building. Ask your chartered accountant before you count the credit in your payback.
What is the HSN code for solar panels?
Photovoltaic cells, whether or not assembled in modules or made up into panels, fall under HSN heading 8541. Turnkey solar works contracts are billed under service codes with the 70:30 split.
Sources
- Ministry of Finance, Notification No. 9/2025-Central Tax (Rate) dated 17 September 2025, effective 22 September 2025 (as cited in CERC suo motu order 13/SM/2025)
- PIB factsheet on GST rate rationalisation for renewable energy devices, September 2025
- MNRE release on GST rationalisation (3 kW rooftop saving of about ₹9,000–10,500), reported by The Economic Times, September 2025
- MNRE, Guidelines for PM-Surya Ghar: Muft Bijli Yojana (subsidy structure)
Status as of 29 October 2026. Tax rules change; this page is general information, not tax advice.