Current position: panels 10%, inverters 18%
Under the Sales Tax Act 1990 (as amended to 30 June 2026), Eighth Schedule, S.No 90, solar panels carry 10% sales tax. The Act has no separate rate or exemption for inverters, so they pay the standard 18% under section 3(1).
Correction, 25 September 2026: this page previously said that Budget 2026-27 proposed 18% on panels and then shelved it. The Finance Bill 2026 contained no solar change at all, so that section has been removed. The panels entry dates from the Finance Act 2025.
Solar Panel Tax Pakistan 2026-27 — 10% GST on Panels, 18% on Inverters
People installing solar often ask how much tax the system carries. The answer is not one rate: 10% sales tax on solar panels and 18% on inverters. This article shows where those rates are written in the law, how they apply to your quotation, and what we have not verified.
1. Where the Rates Are in the Law
| Component | Sales Tax | Source |
|---|---|---|
| Solar panels | 10% | Eighth Schedule Table-1 S.No 90 — “Photovoltaic cells whether or not assembled in modules or made up into panels”, PCT 8541.4200 and 8541.4300 (Finance Act 2025) |
| Solar inverters | 18% | Standard rate, section 3(1) — the Act has no separate entry for inverters |
| Batteries, mounting, wiring, labour | Check before relying | Different HS codes and services — we have not verified their rates, so we do not publish them |
The Finance Bill 2026 changed only S.No 71 and 80 of the Eighth Schedule; it contained no solar change. The Pakistan Solar Association's letter of 29 March 2026 also gave 10% on panels and 18% on inverters.
2. How GST Applies to the Cost of Your System
The key point is that one rate does not apply to the whole system. Panels are at 10% and the inverter at 18% — so your effective (average) rate depends on how much of the total cost is panels and how much is the inverter.
Example: if a system has Rs 300,000 of panels and a Rs 150,000 inverter, GST = (300,000 × 10%) + (150,000 × 18%) = Rs 30,000 + Rs 27,000 = Rs 57,000. That is an effective rate of about 12.7% on Rs 450,000 — neither 10% nor 18%.
The example amounts only illustrate the calculation — real prices vary widely by installer and brand. Rely on your actual quotation.
GST = (Value of panels × 0.10) + (Value of inverter × 0.18)
Effective rate = Total GST ÷ Total equipment cost
Practical advice: when you get a quotation, ask the installer how GST has been applied to the panels and the inverter separately, and whether the quoted price includes or excludes GST.
3. For Importers
A person who imports panels or inverters themselves pays, besides sales tax at the import stage, section 148 advance income tax, which is doubled under the Tenth Schedule for anyone not on the Active Taxpayer List. The rate depends on your HS code — confirm with your customs agent before a commercial import. Filer status does not change the 10% and 18% sales tax rates. How to become a filer.
4. About Net Metering
Net metering and net billing rules come from NEPRA, not from tax law. An earlier version of this page gave rates and time limits from the new regulations; we had not verified them against NEPRA's own documents, so they have been removed. For your connection, check the current rules with your DISCO or on NEPRA's website.
5. FAQ — Solar Tax 2026-27
Are solar panels taxed right now?
Yes. Under the Eighth Schedule of the Sales Tax Act 1990 (S.No 90), photovoltaic cells and panels (PCT 8541.4200 and 8541.4300) carry 10% sales tax — the entry was added by the Finance Act 2025. The Act has no separate reduced rate or exemption for solar inverters, so they pay the standard 18% under section 3(1).
Did Budget 2026-27 raise the tax on solar panels to 18%?
No. The Finance Bill 2026 changed only S.No 71 and 80 of the Eighth Schedule — it contained no solar change at all. In the Sales Tax Act as amended to 30 June 2026, panels stay at 10%. If you heard reports of 18%, that was not in the Bill.
How much GST applies to a complete system?
There is no single rate — it depends on the component. Example: on Rs 300,000 of panels (10%) and a Rs 150,000 inverter (18%), GST is Rs 30,000 + Rs 27,000 = Rs 57,000, or about 12.7% of Rs 450,000. We have not verified the rates for batteries, mounting, wiring and labour, so they are not in this calculation.
Will a new tax apply to a solar system I have already installed?
Sales tax is charged at purchase or import, so a system you have already bought does not attract sales tax again. Net metering and net billing rules (NEPRA's) are a separate matter — this page does not verify them; check with your DISCO.
Does becoming a filer reduce GST on solar?
No. The 10% and 18% sales tax rates are the same for filers and non-filers. Filer (Active Taxpayer List) status affects only income tax withholding — for example, a person who imports panels themselves pays section 148 advance income tax on the import, and that is doubled under the Tenth Schedule if they are not on the ATL.
Sources: Sales Tax Act 1990 as amended up to 30 June 2026 (FBR) — section 3(1) (“eighteen per cent”) and Eighth Schedule Table-1 S.No 90 (photovoltaic cells and panels, PCT 8541.4200 and 8541.4300, 10%, added by the Finance Act 2025); Finance Bill 2026 as published by the Finance Division (Eighth Schedule changes at S.Nos 71 and 80 only). The inverter rate is corroborated by Business Recorder’s report of the Pakistan Solar Association’s 29 March 2026 letter. Rates for batteries, mounting, wiring and installation labour are deliberately not published because we did not verify them. Written by Bilal Hassan — see how we verify rates.
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