Modules to be taxed 5% in India after GST clarification

Facebook
Twitter
LinkedIn
Reddit
Email
Indian revenue secretary Hasmukh Adhia said the tax on modules should actually be 5% rather than the 18% previously announced. Credit: NTPC

Solar modules in India will be taxed at a rate of 5% as opposed to the 18% that was announced two weeks ago under the Goods and Services Tax (GST).

The industry will be hugely relieved since total project capital costs are expected to only go up by only 4%, according to consultancy firm Bridge to India. This is significantly lower than the 10-12% cost increases projected after the original announcement of a far higher tax.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Indian revenue secretary Hasmukh Adhia said the tax on modules should actually be 5% just a few days after a Ministry of New and Renewable Energy (MNRE) official was on record admitting that the original announcement of a high tax could have been an “anomaly”.  An official clarification may be issued on 3 June when GST councils meet.

Engineering and construction services will now also be taxed at around 3%, but the effect of the GST on inverters is still unclear.

Ultimately, Bridge to India said: “The revised rate structure will not have any material negative impact on the industry because of the buffer afforded by sharp fall in equipment costs. It will allow project developers to proceed with construction. Some developers may still file compensation claims but many of them might simply absorb the additional burden to avoid scrutiny of sensitive commercial information.”

Finally the firm has called for MNRE to play a “hands-on role” and give clear advice to all stakeholders.

See Bridge to India's latest blog for PV Tech on the role of Southern states in integrating renewables to the grid.

Read Next

June 9, 2025
Saatvik Solar, a unit of Saatvik Green Energy Limited (SGEL), is building a 4.8GW solar cell and 4GW module manufacturing facility in Ganjam district of Odisha.
June 5, 2025
Solar manufacturer Involt Energy has broken ground on its first solar cell manufacturing plant in the western Indian state of Gujarat, with an initial annual nameplate capacity of 1.78GW. 
June 5, 2025
Indian solar module manufacturer Vikram Solar has received final approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO) and raise capital through the public markets.
June 5, 2025
Investment in clean energy and grids will reach US$2.2 trillion in 2025, double the expected investment into fossil fuels this year, according to data from the International Energy Agency (IEA).
June 2, 2025
Arctech has partnered with ACME Cleantech Solutions to provide 175MW worth of solar trackers for an upcoming facility in Duqm, Oman.
May 30, 2025
Waaree Solar Americas – a subsidiary of Indian solar manufacturer Waaree Energies – has signed a 586MW solar module supply agreement with North Carolina-based Pine Gate Renewables.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
June 17, 2025
Napa, USA
Upcoming Webinars
June 30, 2025
10am PST / 6pm BST
Solar Media Events
July 1, 2025
London, UK
Solar Media Events
July 1, 2025
London, UK
Solar Media Events
September 16, 2025
Athens, Greece