Is GST Charged on Electricity Bills? Complete Guide (2026)
Electricity supply is fully exempt from GST (Schedule II, Entry 104 of Exemption Notification). Your monthly electricity bill from DISCOM/state utility does not include GST. However, electrical equipment, solar panels, and installation services are taxable.
Quick Reference
Electricity Supply (DISCOM)
0% (Exempt)
Electrical Equipment
18%
Solar Panels
12%
Generators
18%
Batteries (inverter)
28%
GST Rate
0% (Supply) / 12–18% (Equipment)
HSN 2716
Electricity Bill — Exempt from GST
Transmission and distribution of electricity by state DISCOMs, power companies, and electricity boards is fully exempt from GST. Consumers (residential, commercial, industrial) do not pay GST on electricity charges.
Electrical Equipment — 18%
Electrical fittings, wiring, switchgear, MCBs, cables, and electrical panels attract 18% GST. Installation and commissioning services for electrical systems also attract 18%.
Solar Panels and Renewable Energy
Solar PV modules/panels attract 12% GST. Solar inverters attract 12%. However, the government reduced GST on certain solar energy devices to promote adoption. Installation services attract 12%.
Generators and UPS
Diesel generators attract 18% GST. UPS systems and inverters for home/commercial use attract 18%. Batteries for inverters attract 28%.
ITC for Businesses on Electricity
Since electricity supply itself is exempt, there is no input GST to claim on electricity bills. However, ITC can be claimed on electrical equipment purchased for business use.
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Electricity is specifically exempted from GST to keep energy costs affordable. It is listed in the GST exemption list.
No — because the electricity itself has no GST. You cannot claim ITC on an exempt supply. However, you can claim ITC on electrical equipment (cables, panels, machinery) purchased for the factory.
Solar PV panels attract 12% GST. Installation services attract 12%. For homes, this is a cost — no ITC can be claimed on residential solar unless under a commercial business.
Generator rental services attract 18% GST. Businesses can claim ITC on this if the generator is for business operations.
