Seeking Clarification for Tax rate and reversal of ITC claimed on Ground Mount Solar Plant

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A company plans to sell a commissioned solar plant and seeks GST rate and ITC reversal clarity. Expert clarified that sale of solar plant attracts 12% GST on transaction value. ITC reversal is required based on remaining useful life under 60-month rule or GST on sale value, whichever is higher.

Bazeer Ahmed

Bazeer Ahmed (Querist)
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07 February 2026 Sir / Madam,
Our Company has owned one Ground Mounted Solar Plant and get commissioned the plant in the year 2023. While procurement GST rate was 70% of project cost @12% tax and 30% of project cost @18%. And we claimed and utilized the ITC. We are utilizing the full power units generation to our textile unit(Group Captive). Now we propose to sell the entire plant. Kindly advise us what is the correct GST tax rate

Query No 1:
whether 70% of the project cost @5% ( present solar modules tax rate is reduced to 5%) and remaining project cost (30% )@ 18% or

for entire project @ 5% tax rate as it is used and old.

Query No 2:
Kindly advise us whether our understanding is correct or not. While selling the plant we should have to reverse the ITC proportion distributed to 60 months as we are going to sell the plant within 5 years.

Kindly clarify that

whether we have to reverse the ITC proportion or no need to reverse the ITC we claimed on the project.

A lot of Thanks in advance,

With warm regards,
Bazeer L

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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08 February 2026 Sale of commissioned solar plant attracts 12% GST on transaction value.
ITC reversal is not automatic — you must pay higher of GST on sale value or ITC attributable to remaining useful life (out of 60 months).

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Bazeer Ahmed

Bazeer Ahmed (Querist)
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09 February 2026 Thank you very Much,Sir for your guidance / advice.

Bazeer Ahmed

Bazeer Ahmed (Querist)
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09 February 2026 Thank you very Much,Sir for your guidance / advice.

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