Solar Panel HSN Code and GST Rate: A Simple Guide

Key Takeaways

• Solar panels (PV modules) fall under HSN 8541.
• GST on solar panels dropped from 12% to 5% from 22 September 2025.
• Solar inverters use HSN 8504. A solar-specific inverter and a general inverter can carry different rates.
• A full solar system with installation is usually billed under a 70:30 split, which works out to about 8.9%.
• A wrong HSN code or rate can cause tax disputes and ITC problems.

Billing a solar job in India? The first question is always the same. Which HSN code goes on the invoice, and what GST rate applies?

Get it wrong, and you risk tax notices, rate disputes, or blocked credit for your buyer. This guide explains the solar panel HSN code, the current GST rates, and how to invoice a full system. It covers panels, inverters, and installation in plain words.

What Is an HSN Code, and Why Does It Matter for Solar?

HSN stands for Harmonised System of Nomenclature. It is a code that classifies goods. Each product gets a code, and each code links to a GST rate. Services use a similar code called SAC.

Every GST invoice must carry the right one. For solar, the rate depends on the product, how you sell it, and the date of supply. That is why one wrong code can change your tax.

Solar Panel HSN Code

The HSN code for solar panel is 8541. It covers photovoltaic cells, whether or not they are assembled into modules or panels.

You will often see longer versions on invoices, such as 8541 43 00 for PV modules. Older bills may show 8541 40. Confirm the exact 8-digit code for your product with your CA, and keep it the same across all your records.

Solar Panel GST Rate: What Changed

Until 21 September 2025, the solar panel GST rate was 12%. From 22 September 2025, it is 5%. Panels supplied on or after that date carry the lower rate.

If your billing template still shows 12%, update it now. Your buyers won't want to pay extra tax, and you may face disputes later.

Solar System HSN Code and GST Rate: Quick Reference

Rates and notifications can change, so verify against the latest CBIC notification before you bill.

Solar Inverter HSN Code

Inverters sit under HSN 8504, which covers static converters. A solar-specific inverter may qualify for the 5% rate. A general-purpose inverter or UPS usually attracts 18%.

So the same code family can carry two different rates. Describe the product clearly on your invoice, and keep the datasheet on file in case of a query.

Batteries, Structures, and Other Parts

Mounting structures, cables, meters, and batteries each have their own HSN codes and rates. Don't bill them under the panel code. Check each item separately.

Solar Installation HSN Code and the 70:30 Rule

Installation is a service. It falls under SAC 9954, which covers work contract services.

When you supply and install a full solar power system together, it is usually treated as one composite supply. The common approach is a 70:30 split. About 70% of the value is treated as goods and taxed at 5%. About 30% is treated as services and taxed at 18%.

Example: a rooftop system costs ₹5,00,000 before tax.

• Goods (70%): ₹3,50,000 at 5% = ₹17,500
• Services (30%): ₹1,50,000 at 18% = ₹27,000
• Total GST: ₹44,500, which is 8.9% of the contract value

Common Mistakes on Solar Invoices

• Using the old 12% rate. Many templates were never updated after September 2025.
• One HSN code for the whole system. Panels, inverters, and services need their own lines.
• No goods and services split. A lump-sum bill with one rate invites questions.
• Treating every inverter alike. Check whether it is solar-specific.
• Missing or short HSN codes. Digits depend on your turnover, so check the current rule.

Can Buyers Claim ITC on Solar?

A business buyer may claim input tax credit if the invoice is valid, the tax is paid to the government, and other conditions are met. Households buying for personal use cannot claim ITC.

For commercial rooftops, rules on work contracts can be tricky. Ask your CA whether your setup qualifies before you count on the credit.

Read Also : HSN Code for Furniture: What Every Manufacturer and Seller Needs to Know

How to Invoice Solar Sales Correctly

If you sell or install solar systems, build a simple process:

1. Set HSN codes and rates for each product in one item list.
2. Show panels, inverters, and services on separate lines.
3. Print the HSN or SAC code on every line.
4. Use the buyer's GSTIN for B2B sales.
5. Review your rates whenever GST notifications change.

Billing software helps you avoid slips. Insidash lets you pick client details from a GST number, use multiple invoice formats, and pull GST reports. You can also use its free HSN/SAC code finder and GST calculator to double-check a code or a tax amount before you send the bill.

Conclusion

The solar panel HSN code is 8541, and the GST rate on panels is now 5%. Inverters, installation, and full systems each follow their own rules, so classify every line with care. Update your templates, split your invoices, and keep your product details on file.

Need clean, GST-ready invoices for your solar business? Contact Insidash and book a free demo. We will show you how to set up your HSN codes, rates, and invoices in one place.

FAQs

1. What is the HSN code for solar panels?
The HSN code for solar panels is 8541. It covers photovoltaic cells, modules, and panels. Invoices often show longer versions such as 8541 43 00 for PV modules.

2. What is the GST rate on solar panels?
The GST rate on solar panels is 5%. It was 12% until 21 September 2025. The lower rate applies to supplies made on or after 22 September 2025.

3. What is the HSN code and GST rate for a solar inverter?
Inverters fall under HSN 8504. A solar-specific inverter may attract 5%, while a general inverter or UPS usually attracts 18%.

4. What is the GST on rooftop solar installation?
A full system with installation is usually taxed on a 70:30 split. That is 5% on 70% (goods) and 18% on 30% (services), or about 8.9% overall.

5. What is the HSN or SAC code for solar installation?
Installation and works contract services fall under SAC 9954. Goods in the system keep their own HSN codes, such as 8541 for panels.