Last updated: 4 June 2026. Electric vehicles are taxed at 5% GST in 2026, and most green goods — solar panels, windmills, biogas and waste-to-energy plants — now sit at 5% too, down from 12%. The catch is in the details: standalone chargers, inverters and batteries sold on their own jump to 18%. This guide maps what you actually pay on EVs and clean-energy equipment after the September 2025 GST overhaul.
Applicability Note: This guide reflects GST rates and CBIC notifications applicable as of 4 June 2026, after the rate changes that took effect on 22 September 2025. GST rates change through CBIC rate notifications and GST Council decisions, and rates on specific HSN codes can differ from the general position. Always verify the current rate for your exact product on gst.gov.in or with a GST professional before pricing or invoicing.
Who Should Care?
This applies to:
- EV buyers and dealers — anyone selling or buying electric two-wheelers, cars, three-wheelers, or buses
- Solar installers, EPC contractors, and rooftop solar buyers deciding how to price or structure an installation
- Manufacturers and traders of renewable energy equipment — solar, wind, biogas, waste-to-energy
- Businesses comparing an EV against a petrol or diesel vehicle for their fleet, where the GST gap is now large
1. The 2026 Rate Map at a Glance
It is World Environment Day on 5 June, so the timing is decent for a plain-English look at how India taxes its green goods. The short version: the clean-energy categories largely landed in the 5% slab when the rate structure was simplified. Here is where the common items sit.
| Item | GST Rate (2026) |
|---|---|
| Electric vehicle (two-wheeler, car, three-wheeler, bus) | 5% |
| Solar modules, cells, and complete solar power generating systems | 5% |
| Windmills, wind-operated generators, biogas and waste-to-energy plants | 5% |
| Solar cookers and solar lamps | 5% |
| EV charger (classified under Notification 12/2019-CT(R)) | 5% — see Section 3 |
| Standalone inverter, battery, cable, charge controller | 18% |
| Public EV charging service | 18% (Karnataka AAR — see Section 3) |
The 5% rates are not a one-off concession. They are part of the restructured GST that took effect on 22 September 2025, when the Council collapsed the old four-slab system into a simpler set — broadly 5% and 18%, with a 40% rate kept for demerit and luxury goods and a few special rates. CBIC gave this effect through a set of rate notifications issued on 17 September 2025 (Notification No. 09/2025-Central Tax (Rate) and the others in that series, plus IGST equivalents).
2. Electric Vehicles: Still 5%, and the Number Held Through GST 2.0
Every electric vehicle attracts 5% GST, whether it is an electric scooter, a car, an auto-rickshaw, or an electric bus. There is no size or price distinction for EVs — fully electric means 5%, full stop.
This rate is older than the 2025 restructure. EVs were moved from 12% to 5% back in 2019 through Notification No. 12/2019-Central Tax (Rate) dated 31 July 2019, effective 1 August 2019. The point worth knowing for 2026 is that the September 2025 overhaul, which reshuffled rates across hundreds of items, left the EV rate untouched. The Council reconfirmed 5% for electric vehicles, so the number you may have seen quoted for years still holds.
One more change helps EV buyers indirectly: the compensation cess that used to load onto larger vehicles has been abolished as part of the same restructure. EVs never carried that cess, but its removal is part of why the gap between an EV and a large petrol vehicle looks different now (see Section 6).
3. EV Chargers and Charging: 5% on the Charger, 18% on the Service
This is the part that gets misreported most often, so it is worth getting right.
For EV chargers and charging stations classified under the entry added by Notification No. 12/2019-Central Tax (Rate) dated 31 July 2019, the rate is 5%. The same notification that cut electric vehicles from 12% to 5% simultaneously cut chargers and charging stations for EVs from 18% to 5%. So a charger bundled and sold with the vehicle clearly gets 5% as a composite supply, and a standalone charger marketed and classified as an EV charger should also be at 5% under the 2019 entry. In practice, some retailers still invoice at 18% under a generic electrical-equipment HSN code, and the classification has been contested — but the position the notification supports is 5%.
The 18% rate applies cleanly to two separate things:
- The public charging service. Charging a vehicle at a public station is treated as a supply of service, not a sale of electricity. The Karnataka AAR took this view in Chamundeswari Electricity Supply Corporation Ltd (2023), holding that battery charging for EVs is a service (SAC 998714) taxable at 18%, with input tax credit available to the operator.
- Standalone lithium-ion batteries sold on their own, which are taxed at 18% as goods in their own right.
Bottom line: the charger has its own 5% entry under Notification No. 12/2019-Central Tax (Rate) dated 31 July 2019 — do not assume it defaults to 18%. The clear 18% cases are the public charging service and standalone batteries. If you run charging infrastructure, confirm the HSN classification you invoice under on gst.gov.in or with your advisor before fixing your pricing.
4. Solar and Renewable Energy Devices: 12% Down to 5%
The September 2025 changes cut the rate on a broad set of renewable energy devices from 12% to 5%. That covers more than just solar panels:
- Solar photovoltaic modules, cells, and complete solar power generating systems
- Solar cookers and solar lamps
- Windmills and wind-operated electricity generators
- Biogas plants and waste-to-energy plants and devices
- Tidal and wave energy devices
For someone putting solar on a roof or a manufacturer supplying these systems, that is a real drop in the headline tax — roughly seven percentage points off equipment that was previously at 12%. It also has a knock-on effect for manufacturers: when your output is at 5% but many of your inputs sit at 18%, you accumulate input tax credit faster than you can use it. That is the classic inverted duty structure, and it is exactly the situation the refund route is built for. If that is you, our guide on how to claim a GST refund walks through the inverted-duty claim.
5. The Catch: Loose Components and Works Contracts
The 5% rate attaches to the device or the complete system. The moment something is sold as a loose, general-purpose component, it usually falls back to 18%.
So an inverter, a battery, a charge controller, or a length of cable, sold separately, is treated as ordinary electrical equipment at 18% — not at the 5% renewable rate. The 5% rate is for the notified renewable energy device or the bundled system, not for every part that goes into it.
Solar installations done on an EPC basis (erection, procurement, and commissioning) are treated differently again. These are works contracts — a mix of goods and service — and the rate notifications apply a deemed split: 70% of the contract value is treated as the supply of goods (taxed at the renewable energy device rate) and 30% as the supply of service (taxed at 18%). With the device rate now at 5%, the goods leg of that split follows the lower rate.
The 70:30 deemed split is a valuation mechanism written into the rate notifications, not a number you choose. Because the goods-side rate moved from 12% to 5% in September 2025, the effective blended rate on a solar EPC contract has shifted. Confirm the exact current rate for your contract structure on gst.gov.in or with a professional before quoting, since how the supply is structured changes the answer.
6. EV vs Petrol or Diesel: The Gap Is Now Wide
The same restructure that kept EVs at 5% reorganised the rate on conventional cars into two slabs — 18% and 40% — and removed the compensation cess that used to sit on top of larger vehicles. Here is how a buyer's GST compares across vehicle types in 2026.
| Vehicle Type | GST Rate (2026) |
|---|---|
| Any electric vehicle | 5% |
| Small petrol car (engine up to 1200cc, length up to 4000mm) | 18% |
| Small diesel car (engine up to 1500cc, length up to 4000mm) | 18% |
| Compact hybrid within the small-car limits | 18% |
| Larger cars and SUVs; larger hybrids | 40% |
Two things stand out. Hybrids are not a separate green category for GST — a hybrid is rated like a petrol or diesel car of the same size, so a compact hybrid is 18% and a big one is 40%. And with the cess gone, a large SUV now carries a flat 40% rather than 28% plus a cess that often pushed the effective rate higher. For a business weighing an EV against a conventional vehicle for its fleet, the 5%-versus-18%-or-40% gap is the headline number.
Rates are only one piece of running a compliant business. For the filing dates that go with all this, see the June 2026 GST filing calendar, and if you have a specific rate question for your product, you can ask our GST experts directly.
Key Takeaways
- Electric vehicles are taxed at 5% GST in 2026, across every category, and the rate survived the September 2025 restructure unchanged.
- Solar power systems, solar modules, windmills, biogas and waste-to-energy plants dropped from 12% to 5%, effective 22 September 2025.
- Loose components — standalone inverters, batteries, and cables — are taxed at 18%, not the 5% renewable rate.
- EV chargers have their own 5% entry under Notification No. 12/2019-Central Tax (Rate) dated 31 July 2019; the clear 18% cases are the public charging service (Karnataka AAR, 2023) and standalone batteries.
- Conventional cars are now 18% (small) or 40% (larger and SUVs), with compensation cess abolished. Hybrids follow the petrol/diesel slab for their size.
- Manufacturers with 5% output and 18% inputs can hit an inverted duty structure — the accumulated credit is claimable as a refund.
Frequently Asked Questions
What is the GST rate on electric vehicles in 2026?
All electric vehicles are taxed at 5% GST, regardless of size or type — electric scooter, car, three-wheeler, or bus. The rate was set by reducing 12% to 5% through Notification No. 12/2019-Central Tax (Rate) dated 31 July 2019 and was retained through the September 2025 GST restructure.
What is the GST rate on solar panels now?
Solar modules, cells, and complete solar power generating systems are taxed at 5%, reduced from 12% with effect from 22 September 2025. The same 5% rate applies to other notified renewable energy devices such as windmills, biogas plants, and waste-to-energy systems.
Is GST on an EV charger 5% or 18%?
The charger has its own 5% entry under Notification No. 12/2019-Central Tax (Rate) dated 31 July 2019, which cut EV chargers and charging stations from 18% to 5% alongside the vehicles. A bundled charger is clearly 5%, and a standalone EV charger should also be 5% — though some retailers invoice at 18% under a generic HSN and the point has been contested. The uncontested 18% case is the public charging service: the Karnataka AAR (Chamundeswari Electricity Supply Corporation, 2023) treated EV charging as a service at 18%.
Do hybrid cars get a lower GST rate like EVs?
No. A hybrid is rated like a petrol or diesel car of the same size — 18% if it falls within the small-car limits (engine and length), and 40% if it is larger. Only fully electric vehicles get the 5% rate.
Why do solar manufacturers end up with refund claims?
When output is taxed at 5% but inputs are taxed at 18%, input tax credit builds up faster than it can be set off against output tax. This inverted duty structure lets the manufacturer claim a refund of the accumulated credit under the GST refund rules.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. GST rules are subject to frequent changes through notifications and circulars. Please consult a qualified tax professional or verify the current provisions on the official GST portal (gst.gov.in) before making any compliance decisions.
Have a specific question about the GST rate on EVs, solar, or green equipment? Our GST experts can help → gstconsultancy.com