The government has reduced the tax on solar panels and other solar products. Now only 5% GST will be levied on them, whereas earlier, 12% tax had to be paid. These new tax rates will come into effect from 22 September 2025. With this decision, the cost of installing solar systems will be reduced, and common people will be able to buy them easily. This can also provide relief from heavy electricity bills. The government wants more and more people to move towards clean means like solar and wind energy.
From solar panels to hydrogen vehicles, everything will be cheaper.
Now, not only solar panels, but many other eco-friendly products will also be cheaper. These include solar cookers, solar lanterns, solar water heaters, photovoltaic cells, and solar power generators. Apart from this, wind mills, plants producing energy from waste, equipment producing electricity from sea waves, and vehicles running on hydrogen fuel cells will also now be available at 5% tax. Earlier, a 12% tax had to be paid on all these, which increased the price. Now, due to a tax reduction, prices will fall and people will get a direct benefit.
What benefits will be there in buying a solar system?
Suppose you are getting a solar system installed for ₹80,000. Earlier, you had to pay ₹9,600 tax on it at the rate of 12%. That means the total cost was ₹89,600. Now that GST has been reduced to 5%, only ₹4,000 tax will be levied on the same system, and the total cost will be ₹84,000. In this way, you can directly save ₹5,600. But this will happen only when companies give you the full benefit of tax reduction.
Higher tax on raw materials
Although customers have got relief, a problem remains for companies. The raw material that goes into making the solar system is still taxed more. When there is less tax on the finished goods and more tax on the raw materials, it is called an inverted duty structure. Due to this, the money of the companies gets stuck with the government. The government has admitted that this problem can increase in the future. But they have said that there is already a refund system for this, and now it will be made faster, so that the money of the companies can be returned quickly.
GST system also became easier
The government has also simplified the structure of GST. Earlier, there were four types of tax slabs on goods, 5%, 12%, 18% and 28%. Now there will be only two slabs, 5% and 18%. Due to this, everyday items like butter, ghee, soap, shampoo, TV and fridge can also become cheaper. There will be a separate tax slab of 40% for expensive goods and luxury items. This change is expected to provide relief to the middle class and common households.
An attempt to provide solar to every home
This step of the government is not just to reduce taxes, but is a big effort to provide relief to every household from electricity bills and promote clean energy. If companies pass on the full benefit of tax cuts to customers, then in the future, installing solar systems will not be limited to cities only, but people in rural areas will also be able to take advantage of it.
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