Solar Panels Dropped to 5% GST — Does That Cover Rooftop Installation Too?
GSTZone Desk · Updated 2026
Short answer
The 5% GST rate applies clearly to solar power generation equipment (panels, modules) as GOODS. When you buy a complete rooftop installation as a bundled contract (panels plus fitting/EPC service), it typically extends to that too — but usually through a specific 70:30 split, where 70% of the contract value is treated as goods at the concessional rate and 30% as services at the standard rate, rather than the entire invoice automatically getting 5%.
In detail
Solar power generating equipment and devices carry a concessional GST rate as goods — this part is straightforward when you’re simply purchasing panels or modules outright.
Rooftop solar, though, is very often sold as a composite EPC (engineering, procurement, and construction) contract — a single bundled price covering the panels, the mounting structure, wiring, and the installation labour. This kind of composite works contract raises the classic goods-versus-services classification question, since GST needs to decide how much of that single bundled price is ‘goods’ (eligible for the concessional rate) versus ‘service’ (taxed at the standard rate).
CBIC has historically addressed exactly this kind of solar EPC contract with a clarified 70:30 split — treating 70% of the contract value as the supply of goods (at the solar-equipment concessional rate) and the remaining 30% as a service (at the standard rate) — a mechanism that continues to apply in principle for this kind of bundled rooftop installation contract post-reform too.
GSTZone tip
If you’re quoting or comparing rooftop solar installation prices, ask specifically how the vendor is splitting the goods-versus-service portion of the GST on their invoice — a vendor charging a flat 5% on the entire bundled contract value, without this split, may not be applying the classification correctly.
Related questions
Does the 70:30 split apply if I buy panels separately from the installation labour?+
If you genuinely purchase panels as a separate transaction from a separate installation service (two distinct invoices, two distinct contracts), each is taxed on its own terms rather than needing the composite-contract split.
What about battery storage systems sold alongside solar panels?+
Battery storage often has its own distinct HSN classification and rate separate from the solar generation equipment itself — worth checking the specific rate for the battery component rather than assuming it rides on the solar panel rate.
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