Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

GST on Solar EPC

464 views 2 replies

Nanu Sharma

14 Points Posted on 15 May 2026

What is the GST rate on Solar EPC Contract Under PM Suryaghar Yojana?

Is it 70% on Goods @ 5% and 30% on Service @ 18%

We can charge 5% on entire project being composite supply.

A lot of confusion, any professional clarification is warmly welcome.

Replies (2)

Quick Summary

GST on Solar EPC contracts under PM Suryaghar Yojana remains a debated issue. Generally, the contract follows a 70:30 valuation split between goods and services, with different GST rates applied. Businesses also face practical accounting and stock valuation challenges for bundled solar project invoicing.

Aashok FC Advisory

Finance Compliance Consultant

983 Points Posted on 15 May 2026

The GST on a Solar EPC contract is not a single flat rate. It follows a 70:30 split: 70% of the value is taxed at 12% (Goods), and 30% of the value is taxed at 18% (Services), resulting in an effective tax rate of 13.8% on the total contract value.

Nanu Sharma

14 Points Posted on 15 May 2026

Thankyou for Reply, but i think from GST reform effective from 22nd September 25, the 70% portion is taxable at 5%. And What about accounting for closing stock. because we purchase multiple products like Panels, Inverters and so on, but make invoice as Solar Power Generating System i mean bundled invoice to comply with the 70 30 split. So whether to make a stock hournal entry at each project or at month end.