GST Rate Changes on Renewable Energy – 56th GST Council Meeting
The 56th meeting of
the GST Council, chaired by Union Finance & Corporate Affairs Minister
Smt. Nirmala Sitharaman, was held at Sushma Swaraj Bhavan, New Delhi.
Among the major reforms, the Council announced reduction in GST rates on
renewable energy devices and issued clarifications to ensure smooth
implementation.
This move is aimed at
promoting clean energy adoption, making solar, wind, bio-gas, and other
renewable solutions more affordable for households and businesses.
Key GST
Rate Reduction – Renewable Energy
The GST rate on renewable
energy devices has been reduced from 12% to 5%. The revised rates will
come into effect from 22nd September, 2025.
List of Renewable Energy Devices with
Revised Rates
|
S.
No.
|
HSN
/ Tariff Heading
|
Description
of Goods
|
Old
Rate
|
New
Rate
|
|
1
|
7321
/ 8516
|
Solar
Cookers
|
12%
|
5%
|
|
2
|
8419
12
|
Solar
Water Heater & Systems
|
12%
|
5%
|
|
3
|
84,
85, 94
|
Renewable
Energy Devices & Parts for manufacture:
(a) Bio-gas plant
(b) Solar power-based devices
(c) Solar power generator
(d) Wind Mills / Wind Operated Electricity Generator (WOEG)
(e) Waste to energy plants / devices
(f) Solar lanterns / lamps
(g) Ocean / tidal waves energy devices / plants
(h) Photovoltaic cells (assembled in modules or panels)
|
12%
|
5%
|
|
4
|
87
|
Fuel
Cell Motor Vehicles including hydrogen-based fuel cell technology
|
12%
|
5%
|
Implementation Date of New
Rates
- Effective
from 22nd September 2025 – for all goods and
services except cigarettes, chewing tobacco, and related products (where
revised rates will be notified later).
Clarifications (FAQs Issued
by CBIC)
1.
Registration Threshold:
No change – existing threshold under CGST Act, 2017 continues.
2.
Notification Reference:
Changes will be notified in rate notifications, available on CBIC website.
3.
Supplies Before/After Rate Change:
o If
supply made before 22nd Sept but invoice issued later → Time of supply
depends on payment & invoice date (Sec. 14 CGST Act).
o If
supply made after 22nd Sept → New rate applies.
4.
Advances Received:
GST rate determined as per time of supply provisions.
5.
Input Tax Credit (ITC):
o ITC
can be availed at the rate prevailing on the date of inward supply.
o ITC
already in credit ledger can be utilized even after rate reduction.
o If
outward supply becomes exempt after 22nd Sept, ITC reversal required.
6.
Refund of Accumulated ITC:
Not available under inverted duty structure when input and output are the same
goods with revised rates.
7.
Goods in Transit / E-Way Bills:
No need to cancel & regenerate e-way bills when new rates come into effect.
Significance of Rate
Reduction
- Lower
cost for consumers – adoption of solar cookers,
water heaters, and renewable systems will be more affordable.
- Boost
for clean energy industry – promotes
investment in renewable technology.
- Alignment
with India’s climate goals – supports the
national mission on renewable energy and sustainable development.
Conclusion:
The 56th GST Council meeting has given a significant push to renewable energy
by reducing GST from 12% to 5% on key devices. This step will directly
benefit households, industries, and renewable energy companies, making green
technology more accessible and affordable.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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