GST on Solar Panels 2026: Rates, Applicability and Exemptions – ClearTax

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All renewable energy devices, including solar devices or solar power projects, are covered under the ambit of GST. This article throws light on the applicability, exemptions and GST rates on solar power based devices.
Solar power converts renewable energy from the sun into electricity either directly through photovoltaics or indirectly through concentrated solar power. The electrical energy generated from the conversion of sunlight is called solar power. The products directly or indirectly powered by sunlight are called solar power based devices. Below are some examples of commonly used solar power based devices:
The Advance Ruling Authority has provided certain clarifications in the case of Sapna Gupta. She is the proprietor of M/s Utsav Corporation, which offers products and services related to renewable energy sources. The entity had sought advance ruling for classification of solar energy products and the GST rate applicable to the.
Thus, devices that directly or indirectly use sunlight for generating energy are called solar power based devices.
The solar power sector is a fast-growing industry in India. Thus the government aims to promote the sustainable growth of innovative solar projects. The Indian Ministry of New and Renewable Energy wants to promote solar energy and promote sustainable growth of solar projects. All renewable energy devices are taxed at 12% GST. But, if the project includes erection, procurement, and commissioning of a solar generating system, it will fall under ‘Works Contract Services’. In this case, 12% GST will be applicable on 70% of the total contract value and 18% on the remaining 30% value. So, we can say that tax incidence on goods is at 12% and services are at 18%. 
Under GST, no exemptions are provided to renewable energy devices and parts of their manufacture. All the renewable energy devices covered under Chapter 84, Chapter 85 and Chapter 94 are charged at 12% GST. 
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