GST · 5 min read · Published 30 Mar 2026
CGST + SGST vs IGST: a solar installer's plain-English guide
If you do solar installations in India and you've ever stared at a customer's GSTIN wondering whether to charge CGST+SGST or IGST, this article is for you.
The one-sentence rule
If your business and your customer are in the same state, charge CGST + SGST. If they're in different states, charge IGST. That's it. The rest of this article is the edge cases.
Where does "your business" live?
Your "place of business" is the state on your GSTIN. If your GSTIN starts with 33, you are a Tamil Nadu business. If it starts with 27, you are Maharashtra. The place where you physically install the panels is irrelevant — what matters is the state code on your GSTIN versus the state code on the customer's billing address.
Where does "the customer" live?
For solar installations, the rule is place of supply = location of the immovable property. The "immovable property" is the rooftop where you install the system. So even if your customer's company is registered in Mumbai but the rooftop is in Pune, the place of supply is Maharashtra — same state as your hypothetical Mumbai office, so CGST+SGST applies.
If you are a Bangalore (Karnataka) installer doing a project at a farmhouse in Goa, the place of supply is Goa — different state from Karnataka — so IGST applies.
Worked examples
Example 1 — Local install
- Your firm: Solar X Pvt Ltd, GSTIN
29AAACS1234R1Z5(state code 29 = Karnataka) - Customer: Mr Murthy, residential rooftop in Bangalore (Karnataka)
- Project value (taxable): ₹3,82,500
- GST rate on grid-tied solar plant: 13.8% (effective from CBIC notification — verify current rate)
- Place of supply = Karnataka. Same state → CGST 6.9% + SGST 6.9%
Invoice:
- Subtotal ₹3,82,500
- CGST 6.9% = ₹26,393
- SGST 6.9% = ₹26,393
- Total ₹4,35,286
Example 2 — Inter-state install
- Your firm: Solar X Pvt Ltd, GSTIN
29AAACS1234R1Z5(Karnataka) - Customer: Goa Resorts Pvt Ltd, rooftop install at their Anjuna property (Goa, state code 30)
- Project value: ₹12,00,000
- Place of supply = Goa. Different state → IGST 13.8%
Invoice:
- Subtotal ₹12,00,000
- IGST 13.8% = ₹1,65,600
- Total ₹13,65,600
Notice you charge a single tax (IGST), not split into two. The customer can still claim full input credit if they're GST-registered.
The 5 most common solar invoicing mistakes
- Charging CGST+SGST on an inter-state job. The customer's GST officer will reject the input credit, and you may have to refund + reissue.
- Forgetting the customer's GSTIN. A B2B customer without a GSTIN on the invoice cannot claim input credit. Always ask.
- Wrong HSN code. Solar PV modules: HSN 8541. Solar inverters: HSN 8504. Installation services: SAC 9954. Mixing them up triggers GSTR-1 mismatch flags.
- Mixing goods + service GST rates. Solar panels are taxed differently from installation labour. Use a composite supply approach where 70% is "goods" and 30% is "service" — or split the invoice into two line items with their correct rates. The CBIC has issued circulars on this; check the latest before finalising.
- Missing place of supply on the invoice. Mandatory under Rule 46. Your invoice template must print it for inter-state supplies.
How SolarIonix handles it
When you create an invoice in SolarIonix, the system reads the customer's billing state and your business state from the organisation profile. If they match, it auto-applies CGST + SGST. If they don't, it switches to IGST. You don't think about it — you just press save.
See GST invoicing in SolarIonix →
Disclaimer: This article is general guidance, not professional tax advice. Always confirm rates and rules with your CA before issuing invoices, especially for large or unusual transactions. GST rates and rules change.