सोलर पर GST: 5% और 18% का 70:30 हिसाब, और इनवॉइस पर इसे कैसे दिखाएँ।
Customers now say "solar pe GST 5% ho gaya" and expect 5% on the whole bill. Installers who print 8.9% get asked why. Both are partly right. This post walks through the notification itself, so your quote, your invoice and your answer on the phone all match.
It is a practical guide, not tax advice. Have your CA confirm the codes and the treatment for your contracts once, then reuse the template.
What changed on 22 September 2025
The GST Council, in its 56th meeting on 3 September 2025, cut GST on renewable energy devices from 12% to 5%, with effect from 22 September 2025 (PIB release from MNRE, 17 September 2025).
The legal text is Notification No. 9/2025-Integrated Tax (Rate), dated 17 September 2025 (copy on the CBIC server), with its twin, 9/2025-Central Tax (Rate), for CGST. Entry 437 of Schedule I covers renewable energy devices, including "solar power generator", "solar power-based devices" and "photo voltaic cells, whether or not assembled in modules or made up into panels".
Schedule I is the 5% schedule. That means 5% IGST on an inter-state supply, or 2.5% CGST plus 2.5% SGST within a state.
Goods vs services: where 70:30 comes from
A rooftop job is not a sale of panels. It is supply plus design, installation and commissioning. Entry 437 carries an Explanation for exactly this case. In plain words:
- If the solar goods are supplied along with other goods and services, and one of those is the taxable service at S. No. 38 of the services rate notification (No. 11/2017-Central Tax (Rate), or 8/2017-Integrated Tax (Rate) for IGST),
- then 70% of the gross consideration is deemed to be the value of the goods, taxed at 5%,
- and the other 30% is deemed to be the value of that service, taxed at the service rate.
"Deemed" is the key word. It does not matter whether your actual material cost is 80% or 60% of the contract. The notification fixes the split at 70:30.
The blended rate, line by line
The service portion is taxed at 18%. So:
- Goods: 70% × 5% = 3.5%
- Services: 30% × 18% = 5.4%
- Effective GST on the contract: 8.9%
Before 22 September 2025 the goods rate was 12%. The same arithmetic gave 70% × 12% + 30% × 18% = 13.8%. The cut took 4.9 percentage points off a rooftop contract, not 7.
Worked example: 3 kW in Gujarat
A Gujarat installer quotes a Gujarat customer ₹1,45,000 before tax for 3 kW. We use MNRE's benchmark cost for 3 kW as the price (MNRE scheme guidelines, clause 5(g)). Your own price will differ.
Both parties are in Gujarat, so this is an intra-state supply: CGST plus SGST.
Line 1: supply of solar power generating system, 70%
- Taxable value: ₹1,01,500
- CGST at 2.5%: ₹2,537.50
- SGST at 2.5%: ₹2,537.50
Line 2: installation and commissioning services, 30%
- Taxable value: ₹43,500
- CGST at 9%: ₹3,915
- SGST at 9%: ₹3,915
Total GST: ₹12,905. Invoice total: ₹1,57,905. That is 8.9% of ₹1,45,000.
Before and after
At the old 12% goods rate, GST on the same job was ₹20,010. The customer saves ₹7,105 at this price. MNRE's release estimates ₹9,000 to ₹10,500 for a typical 3 kW system; a higher base price gives the bigger figure.
For a site in another state, the same two lines would normally carry IGST at 5% and 18%. Where the site is, and where you are registered, decide the place of supply, so settle out-of-state jobs with your CA first.
How to show it on the quote and the invoice
Keep the quote and the invoice in the same shape, so there is nothing to explain later:
- Two lines, not one. Goods at 70% of the contract value, services at 30%, each with its own rate.
- One contract value. State the gross consideration once and derive both lines from it. Do not build the 70% from a bill of materials.
- Subsidy is a note, not a discount. Under the scheme guidelines the central subsidy is released to the customer's bank or loan account after the DISCOM approves the installation (clauses 6(p) and 6(s)). Your consideration is the full contract price, so GST is charged on that. Write "central subsidy of ₹78,000 expected in your account after commissioning" as text below the total.
- Net cost, separately. Print the customer's effective cost after subsidy as information, clearly outside the tax invoice.
HSN and SAC codes
Entry 437 lists its goods under chapters 84, 85 or 94 of the customs tariff. It does not give a single HSN for a complete rooftop system. The service line is the service at S. No. 38 of Notification 11/2017-Central Tax (Rate). Map the exact HSN for your goods line and the SAC for your service line with your CA, then lock both in your invoice template.
Does 70:30 apply to every contract?
Only where the Explanation's condition is met: solar goods supplied together with the listed service. Two common cases:
- Supply only. You sell panels and an inverter to another installer, with no installation. There is no service in the deal, so the goods are simply at 5%.
- Supply and installation on one contract. The standard rooftop job. 70:30 applies.
Splitting one job into a "material" invoice and a separate "labour" invoice from the same supplier does not obviously take it outside the Explanation, which looks at goods supplied "along with" the service. Get your CA's written view before you restructure a contract to chase a lower rate.
What about AMC invoices?
An AMC or service-visit bill has no solar goods in it, so entry 437 and its 70:30 Explanation do not apply. It is a service bill; confirm its code and rate with your CA.
Remember that the first five years of maintenance are already inside the scheme price. Registered vendors must maintain the plant free for five years from commissioning (clause 7(d) of the guidelines). A paid AMC starts after that, or covers work outside the free maintenance.
Quotes sent before 22 September 2025
That window is a year old now, but a few jobs are still open. When a rate changes, the rate that applies depends on the time of supply: when the invoice was issued, when payment was received and when the supply was made. Section 14 of the CGST Act covers the case where these fall on different sides of the change date. If a pre-September 2025 advance sits against a job that is still unbilled, let your CA apply Section 14 before you raise the final invoice.
Checklist for your quote template
- Contract value stated once.
- Goods line at 70%, taxed at 5%.
- Service line at 30%, taxed at 18%.
- CGST and SGST for in-state customers, IGST for out-of-state.
- Subsidy shown as text, not as a deduction.
- HSN and SAC confirmed by your CA.
- The notification cited in small type: 9/2025-Integrated Tax (Rate) and 9/2025-Central Tax (Rate), entry 437.
The solar cost calculator adds the blended 8.9% to any system size, so you can check a quote's GST line in seconds.
