As of September 22, 2025, most solar products, such as panels, modules and water heaters, attract 5% GST, making correct Harmonised System of Nomenclature (HSN) classification essential for accurate invoicing and compliance. Key solar HSN codes include 8541 for modules and 8504 for inverters, both of which are typically taxed at 5%.
Engineering, Procurement and Construction (EPC) contracts often apply a 70:30 valuation split, with 70% treated as goods (12% GST) and 30% as services (18% GST), depending on the contract structure and supply scope.
Solar panel HSN code & GST rate
The table below summarises the HSN codes and latest Goods and Services Tax (GST) rates for solar panels and commonly used solar equipment, helping businesses ensure correct classification and compliance.
|
Product |
HSN Code / Number |
Description |
GST Rate |
|
Diodes, transistors, photosensitive semiconductor devices (including PV cells) |
8541 |
Includes photovoltaic cells and other semiconductor devices used in solar technology. Only PV cells/modules qualify as solar devices; other components fall under general electronics |
5% (for PV cells/modules) / 18% (others) |
|
Solar panels (photovoltaic modules) |
8541 40 11 |
Solar panels/modules used for generating electricity in solar power systems |
5% |
|
Solar cells (assembled in modules or panels) |
8541 40 12 |
Photovoltaic cells connected together or framed for power generation |
5% |
|
Photovoltaic cells (assembled in modules or panels) |
8541 43 00 |
They are used in solar panels and renewable energy systems |
5% |
|
Solar water heater |
8419 12 |
Solar-powered system used for heating water in residential and commercial applications |
5% |
|
Solar inverter |
8504 |
Converts DC power from solar panels into usable AC power |
5% |
|
Solar lantern / solar lamp |
9405 50 40 |
Solar-powered lighting devices used for residential, rural and outdoor applications |
5% |
|
Solar mounting structures / module mounting structures (MMS) |
7308 |
Structures used to support and mount solar panels in rooftop or ground-mounted installations |
5% |
|
Solar charge controller |
8537 |
Regulates current and voltage from solar panels to batteries, ensuring safe charging |
5% |
|
Solar battery / storage battery |
8507 |
Batteries used to store solar energy for later use (lead-acid, lithium-ion, etc.) |
5% |
|
Solar DC cables / connectors |
8544 |
Specialised cables and connectors used in solar installations for electrical connectivity |
5% |
|
Solar pumps (e.g., irrigation pumps) |
8413 |
Solar-powered pumps used in agriculture and water supply systems |
5% |
|
Solar street lighting systems |
9405 |
Integrated solar lighting systems including panel, battery, controller and luminaire |
5% |
|
Solar power plant (EPC / composite supply) |
9954, 9983, 9987 |
Supply of solar power generating system along with installation and construction services |
70% value taxed at 5% + 30% value taxed at 18% |
|
Solar pumps (e.g., irrigation pumps) |
8413 |
Solar-powered pumps used for agricultural irrigation, water supply and rural applications. These systems typically include solar panels, controller and pump unit |
5% |
|
Solar charge controller |
8537 |
Device that regulates voltage and current from solar panels to batteries, preventing overcharging and improving system efficiency |
5% |
GST on solar systems vs individual components
One of the most common areas of confusion in solar taxation is the difference between solar power systems and individual components. The GST rate depends on how the goods are supplied and classified.
GST on solar systems (5%)
Notified renewable energy devices, such as solar panels, solar pumps and complete solar power generating systems, are taxed at a concessional rate of 5%. This lower rate applies when goods are supplied as a complete system or as part of a bundled solar installation.
GST on individual components (18%)
When components like inverters, batteries, cables or charge controllers are sold separately, they are typically treated as electrical equipment and attract 18% GST.
Conclusion
With most solar devices now taxed at 5% GST, the key compliance requirement is correctly distinguishing between complete solar systems and standalone components, as classification directly impacts the applicable rate and overall tax liability. Accurate use of solar HSN codes ensures correct invoicing, better cost estimation and reduced compliance risk.
Errors in classification often lead to misreported taxes, pricing inconsistencies and audit issues, especially in EPC or bundled contracts where valuation rules are more complex. A structured system helps eliminate these risks by standardising the application of GST and HSN codes.
TallyPrime supports this by automating GST calculations, enabling correct HSN code selection and streamlining billing for solar equipment and projects, helping businesses maintain accuracy, compliance and efficiency as they scale.
