GST 2.0 Reform: Key Highlights & Impact on Renewable Energy
- livsolecom
- Sep 26
- 2 min read
The Indian government has rolled out GST 2.0, effective 22 September 2025, with the aim of simplifying the tax system, reducing slab complexities, and boosting economic activity. While many industries will see big changes in taxation, in the renewable energy sector—especially for solar inverters and lithium batteries—the story is more nuanced.
Let’s look at the key highlights and what they mean for businesses and customers.
Key Highlights of GST Reform 2.0
Simplified GST Slabs
The 12% and 28% slabs have been phased out.
Now, most goods fall into two slabs: 5% or 18%.
A special 40% slab has been introduced for luxury and sin goods.
Essentials at 0%
Daily-use items and life-saving products are now exempt or taxed at 0%, reducing household expenses.
Reclassification & Rate Shifts
Many goods from the 12% bracket have moved to 5%.
Several goods previously taxed at 28% have dropped to 18%.
Businesses must update invoices and product classifications under the new HSN structure.
Compliance Made Easier
Pre-filled returns, faster refunds, and better reconciliation for MSMEs.
Reduced paperwork and quicker transition to the new slab system.
Solar modules, PV cells, and renewable components now fall under the 5% slab, down from 12%. This means solar systems become more affordable for households and businesses.
Lithium batteries and Lead acid batteries now have a uniform 18% GST (earlier, lithium-ion was at 18%, but other chemistries were at 28%). This creates clarity and cost stability.
No Change for Solar Inverters & Inbuilt Lithium Solar Inverters
The GST rate for solar inverters and inbuilt lithium solar inverters remains unchanged under GST 2.0.
This means customers and businesses won’t see a direct cost impact here, but the overall system costs may still reduce due to lower GST on modules and components.
Benefits of GST 2.0 for the Sector
Lower project costs for rooftop and commercial solar due to reduced GST on modules and parts.
Predictable pricing with uniform 18% slab on all batteries.
Increased adoption of solar + storage systems, especially in semi-urban and rural areas.
Clearer compliance reduces confusion and disputes around product classification.
Final Thoughts
The GST 2.0 reform is a welcome move for the renewable energy sector, making solar and storage solutions more affordable and transparent.
For solar modules and components, customers enjoy reduced costs (5% slab).
For batteries, uniform 18% GST removes confusion and helps adoption.
For solar inverters and inbuilt lithium solar inverters, GST remains unchanged, but system affordability improves overall due to lower costs in other components.
At Livsol, we remain committed to passing these benefits on to our customers and ensuring clean, uninterrupted, and affordable energy for every home and business.
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