HSN Code for Solar Panels

When Priya at a Pune-based EPC sits down to file the GST return for a Rs 28 lakh month of solar installations, she is dealing with five or six distinct HSN codes on a single invoice. Get one wrong and the GSTIN portal flags the return, the customer's Input Tax Credit (ITC) claim gets delayed, and the next deal stalls while the accountant cleans up the mess. Get them all right and the whole thing takes ninety minutes.

This is the complete HSN code reference for India's solar industry, modules, inverters, batteries, mounting structures, junction boxes, connectors, LED lights, and service SAC codes. We cover GST rates, ITC eligibility, common billing mistakes, and sample invoice line items you can copy directly.

The HSN (Harmonised System of Nomenclature) code system is maintained by the Central Board of Indirect Taxes and Customs (CBIC). For the solar industry, the relevant chapters are Chapter 85 (electrical machinery), Chapter 73 (iron and steel articles), and Chapter 39 (plastics). Knowing which item falls under which chapter, and why, prevents misfiling that can cost your business lakhs in penalties and audit exposure.

HSN Code 8541 40 11, Solar Panels and PV Modules

Solar photovoltaic modules, commonly called solar panels, fall under HSN code 8541 40 11. This is a sub-heading of Chapter 85 (Electrical machinery and equipment), specifically under 8541 (Semiconductor devices) and further sub-classified as 8541 40 (Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels).

The 8-digit code 8541 40 11 specifically covers:

• Monocrystalline silicon PV modules
• Polycrystalline silicon PV modules
• Thin-film modules (including CdTe, CIGS)
• Bifacial PV modules
• Building-integrated PV (BIPV) panels

GST rate on solar panels: 12%

This was revised from 5% to 12% in October 2021. According to the CBIC GST rate notification, solar PV modules are taxed at 12% under the general goods category. The 5% concessional rate that existed earlier applied only to the "parts and sub-parts" exemption list, which was restructured in 2021.

ITC on solar panels:

For a commercial or industrial buyer (GST-registered entity purchasing solar panels for their facility), ITC is fully available on the 12% GST paid on modules. For a residential consumer under PM Surya Ghar, ITC is not applicable unless the homeowner happens to be GST-registered and the system is used partly for business. The full GST treatment for residential solar is covered in our GST on solar systems in India guide and our solar panel GST rate guide.

Customs duty on imported modules:

Solar panels imported into India attract a 40% Basic Customs Duty (BCD) under the Ministry of Finance notification, a rate set in 2022 and maintained through the 2025-26 budget. This is why ALMM-listed domestic modules are price-competitive despite higher manufacturing costs. EPCs proposing imported modules outside ALMM for non-PM Surya Ghar commercial projects should factor the 40% BCD into their landed cost calculation.

HSN Code 8504 40, Solar Inverters and PCUs

Solar inverters, including string inverters, microinverters, hybrid inverters, and Power Conditioning Units (PCUs), fall under HSN 8504 40 90. HSN chapter 8504 covers "Electrical transformers, static converters (for example, rectifiers) and inductors". The sub-heading 8504 40 covers static converters, which includes inverters of all kinds.

GST rate on solar inverters: 12%

The CBIC applies 12% GST to solar inverters as part of the same schedule as solar panels. This parity was maintained in the 2021 GST rate revision and has not changed since.

Inverter vs PCU distinction:

A standard grid-tied string inverter (like a Fronius Primo or Delta M-Series) clearly falls under 8504 40 90. Hybrid inverters (which incorporate a charge controller and battery management system in one unit) are sometimes classified differently by customs officers. The CBIC has issued a clarification that combination units where the primary function is DC-to-AC conversion should still be classified under 8504 40. If you are importing hybrid inverters, insist on a written customs classification ruling from your clearing agent before your first shipment.

HSN Code 8507 60, Lithium Batteries

Lithium-ion batteries used in solar storage systems fall under HSN 8507 60 00. This is one of the most commercially significant HSN codes in the current solar market because hybrid and off-grid system sales are growing rapidly across Tier 2 and Tier 3 cities.

GST rate on lithium batteries: 18%

Unlike panels and inverters at 12%, lithium batteries are taxed at 18%. This is a meaningful cost difference for a hybrid system. On a Rs 80,000 lithium battery bank (typical for a 5 kWh system), the GST component is Rs 14,400, higher than what the customer would intuitively expect if they assume all solar components carry 12%.

Lead-acid battery alternative:

Lead-acid batteries used in solar applications fall under HSN 8507 20 00 and attract 28% GST, a significant difference from the 18% on lithium. For installers offering lead-acid as a budget option in off-grid applications, the higher GST rate must be on the invoice and in your proposal costings. Many EPCs get this wrong.

HSN Codes for Mounting Structures and Balance of System (BOS)

Mounting structures are among the most frequently miscoded items in solar invoices. The correct HSN code depends on the material.

Steel and iron mounting structures: HSN 7326

Most rooftop solar mounting structures in India are galvanized steel or aluminum. Steel structures fall under HSN 7326 90 99 (other articles of iron or steel). GST rate: 18%.

Aluminum mounting structures: HSN 7616

Aluminum alloy mounting systems (popular for metal roofs and industrial installations) fall under HSN 7616 99 90 (other articles of aluminium). GST rate: 18%.

Angle brackets, roof hooks, cable conduits:

Individual BOS hardware items, angle brackets, T-bolts, roof hooks, typically fall under HSN 7318 (screws, bolts, nuts, coach screws) at 18% GST. If you are billing these as a "BOS kit" as a line item, ensure your invoice breaks them out separately from the module supply, or the auditor will apply the highest applicable rate to the entire bundled line.

HSN Codes for Junction Boxes, Connectors, and Wiring

These components make up a small percentage of the invoice value but a disproportionate percentage of GST filing errors, because they span two chapters of the HSN.

Junction boxes (plastic enclosures): HSN 3926 90 99 (articles of plastics not elsewhere classified), 18% GST.

Metal junction boxes / enclosures: HSN 8537 10 00 (boards, panels for electric control, under 1,000V), 18% GST.

MC4 connectors and solar cable connectors: These typically fall under HSN 8536 90 00 (electrical connectors and switches for voltages not exceeding 1,000V), 18% GST.

DC solar cables: HSN 8544 49 90 (insulated electric conductors, not fitted with connectors), 18% GST.

AC cables from inverter to distribution board: Same HSN 8544 49 90, 18% GST.

SAC Codes for Solar Installation Services

When your EPC charges for labour, installation, commissioning, or AMC (Annual Maintenance Contract), the item on the invoice is a service, not goods. Services use SAC (Services Accounting Codes) rather than HSN codes.

SAC 995461, Solar panel installation services: This covers the physical installation of solar PV systems including rooftop mounting, wiring, and commissioning. GST rate: 12%.

SAC 998714, Maintenance and repair of electrical equipment: This covers AMC, preventive maintenance visits, and repair services for solar systems. GST rate: 18%.

SAC 997212, Electrical wiring service (sub-contracted): If you sub-contract the internal electrical wiring work to a licensed electrician, the sub-contractor's invoice to you should use SAC 997212 at 18%.

The composite supply rule is one reason many EPC businesses benefit from having a solid grasp of their cost structure, see how other companies handle this in our solar business capital guide.

Common GST Billing Mistakes in the Solar Industry

The Solar Invoice Quality Framework is a set of six checks that every solar EPC should run on every invoice before it leaves the billing desk. It was developed from the most common GST audit observations affecting Indian solar EPCs.

The Solar Invoice Quality Framework, Six Checks

1. 1

   HSN code on every line item

   Never use a single HSN for the entire system. Each component -- panels, inverter, battery, mounting, cables -- must be a separate line with its own 8-digit HSN code and applicable GST rate.

2. 2

   Verify the buyer's GSTIN

   Run the buyer's GSTIN through the CBIC portal before every B2B invoice. An invalid or cancelled GSTIN means your invoice will fail reconciliation in the buyer's GSTR-2B and they will dispute it.

3. 3

   Separate goods and services

   Supply of goods (panels, inverter, battery) and supply of services (installation, commissioning) should be on separate invoice lines with their respective SAC codes. Bundling them into a lump sum invites the auditor to apply the highest rate to the whole amount.

4. 4

   Match PO and invoice HSN codes

   If your Purchase Order from the customer says "Solar PV System" as a single line item and your invoice reflects it the same way, GSTIN reconciliation will fail. Match invoice line items to PO line items one-to-one, or issue a PO amendment before billing.

5. 5

   Battery HSN is 18%, not 12%

   Lithium batteries at HSN 8507 60 00 attract 18% GST. Billing them at 12% (same as panels) is the most common single error in solar invoices. The CBIC has explicitly not extended the 12% rate to batteries and this discrepancy surfaces immediately in GSTR-2A matching.

6. 6

   Use correct place of supply

   For inter-state supply (your EPC registered in Gujarat selling to a buyer in Maharashtra), charge IGST. For intra-state, charge CGST + SGST. A wrong determination here creates a credit reversal issue that takes months to resolve with the tax authority.

ITC Eligibility Table, What You Can and Cannot Claim

Input Tax Credit eligibility is the most practically important question for a GST-registered EPC that is buying components and reselling or using them in installations.

The Section 17(5) block mentioned in the last row applies to goods and services used for personal consumption and for immovable property (other than plant and machinery). A housing society installing solar on a residential block cannot claim ITC because the system is affixed to residential premises that are not plant and machinery in the statutory sense. The CBIC GST circular 172/4/2022 clarifies this restriction.

Sample Invoice Line Items for a 5 kW Hybrid Solar System

Here is what a correctly structured invoice for a 5 kW hybrid system with 5 kWh lithium storage should look like. This is based on a B2B supply to a GST-registered commercial buyer in the same state (intra-state CGST + SGST split).

Line	Description	HSN/SAC	Qty	Rate (Rs)	Value (Rs)	CGST	SGST	Total (Rs)
1	Solar PV Module, 500W, Mono PERC, ALMM listed	8541 40 11	10 Nos	14,000	1,40,000	6% = 8,400	6% = 8,400	1,56,800
2	String Inverter, 5 kW, hybrid, 48V	8504 40 90	1 No	38,000	38,000	6% = 2,280	6% = 2,280	42,560
3	Lithium-ion Battery, 51.2V/100Ah, 5.12 kWh	8507 60 00	1 No	82,000	82,000	9% = 7,380	9% = 7,380	96,760
4	GI Mounting Structure, 5 kW rooftop	7326 90 99	1 Set	14,000	14,000	9% = 1,260	9% = 1,260	16,520
5	DC Solar Cable 4mm2, 50 metres	8544 49 90	50 M	90	4,500	9% = 405	9% = 405	5,310
6	MC4 Connectors, pair	8536 90 00	4 Pairs	350	1,400	9% = 126	9% = 126	1,652
7	Junction Box, plastic IP65	3926 90 99	2 Nos	800	1,600	9% = 144	9% = 144	1,888
8	Solar System Installation and Commissioning	995461	1 Job	25,000	25,000	6% = 1,500	6% = 1,500	28,000
	Total				3,06,500	21,495	21,495	3,49,490

Pros and Cons of the Current HSN/GST Structure for Solar EPCs

How QuickEstimate Helps You Get HSN Codes Right on Every Proposal

Priya's problem at month-end is not that she doesn't know the HSN codes, she does. The problem is that her four sales reps are generating quotations on the fly, sometimes collapsing the entire system into one line item with a rough GST number, and she has to manually correct every invoice before submission.

QuickEstimate solves this at the template level. Set up your product catalogue once with the correct HSN codes and GST rates per component, and every quotation your team generates automatically produces a GST-correct, line-item invoice. No corrections, no mismatch.

• Quotation System -- build a master product catalogue with HSN codes, GST rates, and ALMM status locked in. Every quote auto-populates the correct tax lines.
• Proposal Generator -- generate a branded PDF proposal with line-item breakdowns that match your GST invoice, so the customer sees consistent numbers from quote to billing.
• Sales Reports -- track revenue by product category so your GST return reconciliation is a ten-minute job at month end, not a two-day firefight.
• Pipeline Management -- flag deals where the quotation has not been converted to a formal invoice, so no GST obligation slips through unrecorded.

If you are figuring out whether a CRM and proposal tool makes financial sense for your operation, the when to buy a solar CRM guide walks through the cost-benefit. For how to qualify the leads that get to the quoting stage, see qualifying solar leads.

What to Do Before Your Next GST Return

Three steps to clean up your solar GST billing before the next return cycle:

1. Pull every invoice from the last quarter and verify each line's HSN code against the master table in this article. Flag any line where "Solar System" appears as a single bundled description, those are the ones most likely to generate an audit notice.

2. Set up a product catalogue in your quoting tool with locked HSN codes. Whether you use QuickEstimate or another tool, the catalogue is the single source of truth. If your accountant needs to know the HSN for MC4 connectors, it should live in the system, not in someone's head.

3. Brief your sales team on the battery distinction. The one rule that trips up the most invoices is batteries at 18% vs panels at 12%. A five-minute WhatsApp voice note to your sales and ops team eliminates the error at source. For how to structure your team's processes, see our solar sales team guide and our solar marketing strategy for how to keep the pipeline full once your operations are clean.

Frequently asked questions

What is the HSN code for solar panels in India?

Solar PV modules (solar panels) use HSN code 8541 40 11 in India as of 2026. This falls under Chapter 85 of the HSN, which covers electrical machinery and equipment. The 8-digit code specifically covers photovoltaic cells assembled into modules or panels, including monocrystalline, polycrystalline, bifacial, and thin-film panels. The applicable GST rate is 12% under CBIC schedule II. The same 12% rate applies regardless of wattage, 100W, 330W, or 550W panels all use the same HSN code.

What GST rate applies to solar inverters in India?

Solar inverters fall under HSN code 8504 40 90 (static converters) and attract 12% GST. This includes string inverters, microinverters, hybrid inverters, and Power Conditioning Units (PCUs). The 12% rate was set in October 2021 and has not changed since. For hybrid inverters that combine an inverter with a battery management system, the classification should still be 8504 40 90 per CBIC guidance, as the primary function is DC-to-AC power conversion.

Is GST on lithium batteries 12% or 18%?

GST on lithium-ion batteries is 18%, not 12%. Lithium batteries used in solar storage systems fall under HSN 8507 60 00. The 18% rate is significantly higher than the 12% applied to panels and inverters. This is the most common HSN/GST error in solar invoices, many EPCs apply 12% to the entire system including the battery. CBIC has not extended the 12% concessional rate to batteries. On a Rs 80,000 lithium battery, this difference amounts to Rs 4,800 in under-charged GST, a direct liability for the billing entity.

Can a residential customer claim ITC on solar panel GST?

No. A residential consumer who is not GST-registered cannot claim Input Tax Credit on the GST paid on solar panels, inverters, or any other system component. The GST is effectively a cost for the homeowner. For GST-registered business owners who install solar at their commercial premises, ITC is fully available on all components. For PM Surya Ghar residential installations, the consumer pays the full invoice including GST and the central subsidy is a separate benefit paid post-commissioning.

What SAC code should a solar EPC use for installation services?

Solar system installation services use SAC code 995461 (electrical installation services including solar panels, photovoltaic cells, wind power plants). The GST rate for this SAC is 12%. If you charge separately for Annual Maintenance Contract (AMC), that falls under SAC 998714 (maintenance and repair of electrical equipment) at 18% GST. Always separate the installation service line from the goods supply lines on your invoice to ensure correct tax treatment.

Are mounting structures taxed at 12% or 18% GST?

Mounting structures are taxed at 18% GST. Steel structures fall under HSN 7326 90 99 and aluminum structures under HSN 7616 99 90, both at 18%. This is different from the 12% applied to panels and inverters. If you bill mounting structures as part of a bundled "solar system" line at 12%, you are under-collecting GST on the mounting component and creating a compliance risk. Always bill mounting structures as a separate line item at 18%.

What is the HSN code for solar LED lights?

Solar LED lights fall under HSN 9405 10 30 (LED electric lamps) at 12% GST. Solar street lights and solar garden lights that incorporate a PV panel, battery, and LED fitting are typically classified as complete assemblies under 9405. If the LED light and the solar panel are sold separately, each component takes its own HSN, the panel under 8541 40 11 at 12%, the LED under 9405 at 12%, and the battery under 8507 at 18%.

Do solar cables need a different HSN code from solar panels?

Yes. DC solar cables fall under HSN 8544 49 90 (insulated electric conductors) at 18% GST, distinct from the 12% applicable to panels (8541 40 11). Similarly, MC4 connectors fall under HSN 8536 90 00 at 18%. Using the panel HSN (8541) for cables is a classification error that creates a GST mismatch in GSTR-2A reconciliation for your buyer. Always itemise cables and connectors as separate lines with their correct HSN codes and 18% GST rate.