Case Of: M/s. ABB India Ltd
Issued By: Karnataka High Court
Order No: WP No. 17875 of 2023
Date: 15th Dec 2025
The petitioner was engaged in the supply of solar power generating systems and associated equipment, including solar inverters used in renewable energy installations.
During assessment proceedings, the department took the view that solar inverters constituted independent electrical equipment, taxable at 18% GST, rather than being treated as a component of the solar power generating system.
The assessee contended that solar inverters are functionally inseparable from the solar power generating system, as they convert DC power generated by solar panels into usable AC electricity.
Relying on concessional GST rate provisions applicable to renewable energy devices and parts, the petitioner argued that such supplies should be taxed at 5% GST when supplied as part of the solar power generating system.
The Court noted that the solar inverter performs a critical and indispensable role in the functioning of a solar power generating system, enabling conversion of the electricity generated by solar panels into usable power.
It observed that without an inverter, the electricity generated by solar panels cannot be effectively transmitted or utilized, thereby rendering the solar power generating system commercially incomplete.
The Court emphasized that components forming an integral and functional part of renewable energy devices cannot be artificially segregated for the purpose of applying a higher GST rate.
Accordingly, the Court held that solar inverters supplied as part of a solar power generating system qualify for the concessional GST rate of 5% applicable to renewable energy devices and their parts.