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GST Rates & HSN Codes for Solar Rooftop Products

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GST Rates and HSN Codes for Solar Rooftop Products in India

HSN (Harmonized System Nomenclature) Number and SAC (Services Accounting Code) Number got its place as a new column in invoices for Solar Equipment after the implementation of the GST. Yes, it is mandatory to give a column in invoices for HSN/ SAC. Confused? Here’s an attempt to make it simpler for you.

Solar energy has been emerging as a progressive and effective power generation alternative for residential, commercial, industrial use. Government policies have so far have remained favorable, and this had an advantage for the solar industry to have a 3-fold increment on Year-on-Year basis. The GST rate for the material used for equipment stood at 5% and it was making a smooth progress. Customers were understanding the need and have been inclined to buy such solar solutions that help them reduce their dependence on grid power.

But now as per government’s new norms, from October 01, the GST rate will be 12%, due to which the price of solar power equipment will increase by 7% – 10 %.

What has HSN and SAC got to do with the GST?

We all know that GST is Goods and Service Tax. Which means the tax on Goods or Services or Both. HSN number is used to classify the Goods that come under GST into “22 sections and 99 chapters”. SAC codes are similar to HSN codes and have been used since before implementation of GST.

Why HSN and SAC?
GST is followed in around 160 countries out of 196. Globally, most of them follow similar HSN/ SAC codes with a very slight difference between one another. This helps in attracting foreign trade as (import or export) by easing the taxations.

How is HSN code classified?

It has 21 sections with 99 chapters, 1,244 headings and 5,224 subheadings. They are arranged based on the product degree of manufacture or in terms of its technological complexity. The natural products that include plants and animals come under the initial sections. While the man-made or technologically advanced products that include machinery come later.

The HS comprises approximately 5,300 article/product descriptions that appear as headings and subheadings, arranged in 99 chapters, grouped in 21 sections. The six digits can be broken down into three parts. The first two digits represent the chapter the goods are classified in, e.g. 09 = Coffee, Tea, Maté and Spices. The next two digits identify groupings within that chapter, e.g. 09.02 = Tea, whether or not flavoured. The final two digits are even more specific, e.g. 09.02.10 Green tea (not fermented). All countries classify products in the same way, upto 6 digits filtering (a few exceptions exist where some countries apply old versions of the HS).

Every section is a collection of various chapters. The sections represent broader classification of goods and chapters represent a smaller section that filters down to particular product section.

In order to identify the goods better, India and some of the countries use this 8 digit code for a more specific classification. Some of the HSN codes use dashes in the beginning of description which denotes an article that belongs to a group covered under a heading. A double dash indicates that the article is sub-classification of the preceding article that has a single dash. And triple dash indicates that the article is a sub classification of the preceding article that has a double dash or triple dash.

SAC code in GST

SAC and HSN are the similar codes under GST. In case of services, for each type of service provided is given a unified code for recognition, measurement and taxation. These are known as SAC codes. In the current service tax regime, SAC codes are already defined for each type of service.

  • The small dealers under composition scheme will not require to mention SAC codes in their invoices. The codes will be mentioned in invoice and in the GST tax return details which will be uploaded on the GST portal.
  • The small business under composition scheme will not be required to mention SAC codes in their invoice.

Services will continue to be classified under Services Accounting Code (SAC) which is issued by the government for service tax. This is expected to remain in GST regime.

How it affects Solar Industry?

Though our Honourable Prime Minister Mr. Narendra Modi has announced in his speech that all Renewable energy equipments will be taxed 5% GST, traders are confused as there have been no written statements or Orders passed yet which has stalled the market since a week.

As per our understanding, HSN Numbers and GST % are as follows:

This May we had published a preliminary guide on expected GST rates for the rooftop solar industry. Now that the dust has settled, the final rates are clear. Below information serves as a ready reference for the GST rates 

applicable along with relevant HSN codes for the solar industry in India:

Item HSN/SAC Code GST Rate Applicable
Battery 8507 28%
Solar Module 8541 5%
Charge Controller 8504 28%
LED Lights 9405 12%
Solar Lantern with Modules 85 (4/6 digit code awaited) 12%
Solar Power Generating Systems 85 (4/6 digit code awaited) 12%
Solar Inverter 8504 12%
Data Loggers 8517 18%
GI Mounting Structure 7308 18%
Al Mounting Structure 7610 18%
Cables 8544 18%
Solar Water Heater & System 8419 12%
Erection, Installation & Comissioning Services 9954 18%

*The GST rate applicable on solar inverters is still under debate with some vendors invoicing at 5% GST and others at 28%.

In addition to this, the rates applicable on the various components required in the assembly of solar panels are below:

Item HSN Code GST Rate Applicable
Tempered Glass 7007 28%
EVA Backsheets 3921 18%
Aluminium Frame 7604 18%
Junction Box 8536 28%
Solar Cells 8541 12%
Solar PV Ribbon 7409 18%

“ There are no secrets to success. It is the result of preparation, hard work, and learning failure ”

- Tina Retina

Top 10 Solar Panel Manufacturers in India

we have listed the top 10 solar manufacturers in India and we are distributors of all the major manufacturers in Chennai, Tamil Nadu

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Solar Panel Operation & Maintenance (O&M)

Worried about solar panels and Cyclone?

 Fret not, solar panel systems are incredibly durable and require little to no maintenance over their productive lifetime – which can span 25 years or more. In the event that something does go wrong, your solar PV system components have very long warranties that would cover replacement and repair costs. 

solar installed on a rooftop in chennai

Solar panel warranties

Solar panel manufacturers provide a range of warranties that guarantee you will have support and coverage in the unlikely event of an issue, such as hail or falling tree branches.

Power output warranties guarantee that panel performance won’t fall below a specified level over the term of the warranty (usually 25 years). For instance, a manufacturer might provide a warranty to guarantee that peak power output won’t fall below 85 percent for 25 years.

Some manufacturers will also include an additional warranty that promises a higher output level over a shorter period of time. As an example, a secondary warranty might guarantee no less than 90 percent of initial power output for the first 10 years.

Panels typically come with a workmanship warranty that protects consumers against defective panel parts, generally for the first five years of operation. Inverters also come with warranties, usually for 10 years.

Learn more about solar panel warranties and other indicators of quality in Solstrom Guide to Evaluating Solar Panel Quality.

How to maintain your solar panels

Solar panels are made of tempered glass, so they’re built to withstand hail and other rough weather. With the exception of tracking mounts, solar panel systems don’t have movable parts, which cuts down on the possibility of any problems.

Any issues with solar panel performance are usually related to electricity production, which is why most installers recommend monitoring your system’s production. By paying attention to changes in production, you can identify and address issues proactively.

Generally, solar panels don’t need to be cleaned. If you live somewhere where there is a lot of smog, dust, or dirt, you may see a dip in your production over time that can be remedied by cleaning your panels. If your panels are mounted on your roof, however, your best option is to hire a professional cleaning service rather than try to clean them yourself. Your installer will be able to recommend someone local to help you.

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HOW TO FIND WHETHER SOLAR PANELS ARE WORKING?

When you service all makes of turbine, all around the world, how do you make sure that safety standards are maintained at the highest level? It’s an important question – and when we talk to our customers about what’s most important to them competencies in renewable energy systems. IRecco’s extensive range of robust and reliable products backed by its cutting-edge R&D and more than two decades of expertise are designed to ensure optimum performance. Of course, it’s a given that all turbines live up to strict legislation, but that’s not really where the greatest safety challenge lies. If you look at the causes of incidents, more than 90% are caused by human behavior. That’s why we believe that keeping the highest safety record means creating a safety-first mindset.

The people I meet who service our turbines are special: They’re proud of what they do, and they take their jobs very seriously. It’s not an easy environment to work in. When you’ve experienced standing on the top of an 80m high turbine, swaying in the wind like a ship at sea, you really respect what they do. It takes a cool head and a lot of courage.

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Why it Might Be Time to Visit Wind Farm Self-Performance

But not all the people who are attracted to this lifestyle – because that’s what it is – are not natural-born rule followers. And to secure a high safety level for all, we spend a lot of time developing watertight safety procedures and protocols which must become second nature for them. Because not following rules has serious consequences. Secondly, training is vital, both technical safety training, turbine specific training as well as Safety awareness training. Adding to this leadership needs to be strong and leaders perform safety walks to check first-hand what our engineers will encounter. Even our executive leadership takes part, and our CEO has climbed the ladder and walked the roof of a nacelle… so when they talk safety they can speak from experience.

“ There are no secrets to success. It is the result of preparation, hard work, and learning failure ” -Tina Retina

Our goal is to create the same service documentation for each and every turbine, in a standardized, user-friendly format. Our engineers already have enough to think about without having to navigate convoluted directions! With this global service manual, we’re able to give the same training round the world to make sure all our technicians stay safe. Performance and target-wise we don’t distinguish between brands and expect the same safety performance when servicing all makes of turbines. Because safety comes first. It’s that simple.

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Off Grid Vs On Grid

On-Grid vs. Off-Grid Solar Power Plant.

When it comes to the topic of solar panel installation, you may have heard about the terms grid-tied (a.k.a on-grid) and off-grid solar Power Plant. These two are such important concepts to learn when installing solar power systems.

Depending on your location in India, power requirements and grid availability, you will have to choose which one to install. In this article, we will further elaborate on the differences between these two systems.

What’s the main difference between on-grid & off-grid solar systems?

The simple answer to this is that on-grid / grid-tied solar systems are connected to the main utility power lines called the grid, while off-grid systems are not. An off-grid system may require batteries and, sometimes, a back-up generator; while an on-grid system doesn’t.

In a grid-tied system, there will be a lesser number of components compared to an off-grid one. It’s simply because it does not need an energy storage device, back up generators or complex control electronics.

If you want a cheaper and simpler solar power system, you will go for on-grid system. However, in places where grid power is unstable or not available at all, off-grid solar systems will provide the electricity your appliances need.

 
Solar Power Plant mounted on solstrom's aluminium single module mounting structure

Top 5 Differences: On-grid Vs. Off-grid Solar Systems

On-Grid Solar Power Plant
  • Connects to utility’s grid for synchronization and operation.
  • Can export excess solar energy to the grid depending on the utility regulations, which requires approvals and documentations.
  • Does not produce solar energy when the grid is down.
  • Lower maintenance and installation costs.
  • A simple system and has less number of components.
Off-Grid Solar System
  • Does not need any connection to the power system’s grid.
  • Uses batteries to store solar energy for later use.
  • Not affected by grid failures and shutdowns.
  • Maintenance and installation costs are more expensive.
  • Can sometimes be complex but you will learn a lot more.

Grid Connected Vs Off Grid solar - Components

On Grid Solar System components

  • Solar Panels.
  • DC Distribution Box DCDB
  • Inverters
  • Module Mounting Structures
  • AC Distribution Box (ACDB)
  • Energy meter
  • AC Circuit breaker at interface point

Off-Grid Solar System components

  • Solar Panels

  • Solar Charge Controllers

  • DC Combiner Box (AJB/DCDB)

  • Batteries

  • Off-Grid/Hybrid Solar Inverters

  • AC Breakers

  • Meters (Optional)

  • Back Up Generators (Optional)

Conclusion

The differences between off-grid and on-grid systems are presented here in this blog post. They both have their advantages and disadvantages when it comes to cost, user preference, efficiency, and dependability. However, it is up to the homeowner, or whoever is planning to install solar panels, to do an assessment.

You may want to check how to design a solar power system here. We will be adding new tutorials using different kinds of solar PV simulation software. Here are some articles you might want to read:

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