Individual farmer solar plant GST requirements

i am individual farmer. I am setting up 1 mw solar power plant on my own 5 acres land in solapur dist.

I have signed PPA with mahadiscomm (state govt undertaking) for 25 years with 3.30 tarrif

when i approached bank for the loan approx 3.0 CR (rest is my equity total project cost 4.0 CR), bank is asking me for the GST certification. I am indivdual farmer and i am not going to issue GST bill to the disscomm as sale of electricity is not under GST act

My consultant is saying that I still need to register and get GST number as

1] my annual revenue will be approx 50L and 2] he need my GST to mention it in eWay bill

My question is since there no GST obligations for me for this business (sale of electricity) do i need to get GST ? if yes why ?

Thanks in advance

Hi Jayashree,

This is a common query for solar power producers, especially individual farmers setting up plants.

Key Points:

Is sale of electricity taxable under GST?
No, the supply of electricity by an individual to a distribution company (like Mahadiscom) is exempt from GSTas per GST law (Electricity supply is outside the scope or exempt).
Is GST registration mandatory for you?
GST registration is generally required if your aggregate turnover exceeds ₹20 lakhs (₹10 lakhs for special category states). However, turnover here means taxable supplies.
In your case:
Since your supply of electricity is exempt, your turnover will not include that income for GST registration threshold. Hence, no mandatory GST registration.
Why is your consultant asking for GST registration?
- Your consultant says annual turnover will be ₹50 lakh (probably including non-taxable supplies or other business) which might require registration if taxable supplies exceed threshold.
- Also, for bank loans and input credits on materials and services procured (if any) related to construction or maintenance, a GST registration helps in claiming input credit.
- For eWay bill—if you are transporting goods (like solar panels, machinery) for your project, and those goods exceed ₹50,000 in value per consignment, then you need to generate eWay bills. Only a registered person can generate eWay bills (except in some cases where unregistered can generate with limited facility).
Your position:
- If your only business is selling electricity (exempt supply), no GST registration is needed.
- But if you buy goods/services with GST (like equipment) and want to claim Input Tax Credit or want to generate eWay bills, registration helps.
- Bank is asking for GST certificate probably to ensure compliance and proper documentation for the loan.

Summary:

No GST registration is mandatory solely because you sell exempt electricity.
Registration can be voluntary, to avail input credit or comply with procedural needs (eWay bills).
If you do not have other taxable supplies and do not want to claim input credit, you can explain to the bank the nature of your business and exemption. But practically, banks prefer GST registration as part of documentation.

Suggestion:
Consult a GST expert with your full business details to check if voluntary registration benefits you (like claiming input credit on solar equipment). It may simplify your bank loan process.