New GST on Electricity: Is It Covered Under GST?
- The GST on electricity is 0% (Nil-rated) for electrical energy under HSN 2716 00 00.
- The electricity GST rate is 0% for both residential and commercial electricity consumption.
- Transmission and distribution of electricity by an electricity utility is exempt from GST.
- Separately supplied installation, repair or maintenance services may attract GST at their applicable rates.
- The electricity bill GST rate on the electricity energy charge itself is 0% (Nil); separate taxable services, if any, may have their own GST rate.
Electricity powers our homes, businesses, and industries. But when it comes to taxes, many people are confused about whether electricity is taxed under GST. In this blog, we’ll break down what the law says about the gst on electricity , how it applies, and where it doesn’t.
Calculate Interest on Overdue Electricity Bill Receivables
Join our guided walkthrough to see how BUSY can transform your business operations.
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for common electronic items (no compensation cess).
New GST on Electronic Items
Electricity itself is Nil-rated, but electrical and electronic appliances are taxable at their applicable GST rates. From 22 September 2025, air conditioners were reduced from 28% to 18%, while several other common appliances remained at 18%.
| Product Type | GST Rate From 22 Sep 2025 | Rate Before 22 Sep 2025 |
|---|---|---|
| Ceiling fans | 18% | 18% |
| Mixer-grinders | 18% | 18% |
| Refrigerators | 18% | 18% |
| Air conditioners, including inverter ACs | 18% | 28% |
| LED lamps and general luminaires | 18% | 18% |
| Inverters and UPS systems | 18% | 18% |
Product Type
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Product Type
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Product Type
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Product Type
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Product Type
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Product Type
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Is Electricity Covered Under GST?
The short answer is: No, electricity supply is not covered under GST.
- Electricity is classified as a basic necessity, and the government has kept it outside the GST regime.
- No GST is charged on your electricity bill from your utility provider.
- Electricity provided by government-authorized distribution companies is exempt from GST.
Get a Free Trial – Best Accounting Software For Small Business
Issue Credit Notes for Electricity Billing Disputes in Seconds
* No credit card required
What About Electricity-Related Services?
Although electrical energy itself is Nil-rated at 0% GST, some separately supplied electricity-related services may attract GST.
- Installation and Maintenance: Separately supplied electrical wiring, installation or repair services generally attract 18% GST, subject to classification.
- Electricity Utility Charges: Charges for releasing electricity connections, meter rent, testing, shifting meters/service lines and similar ancillary services provided by an electricity transmission or distribution utility are exempt from GST.
Get a Free Trial – Best GST Accounting Software For Small Business
What About the GST on Electricity Bills for Businesses?
- The electricity bill GST rate on electrical energy itself is 0% (Nil), including electricity consumed by businesses.
- Transmission and distribution of electricity by an electricity utility is exempt from GST.
- DG set rental, power-backup or other separately supplied services may attract GST based on their applicable classification.
Businesses may claim eligible Input Tax Credit on taxable electricity-related services used for taxable business supplies, subject to GST conditions.
Get a Free Demo of – Electrical Shop Accounting Software
Conclusion
While electricity itself is not taxed under GST, services and products connected to it may be. Whether you’re a household consumer or a business, understanding this difference helps you manage costs and stay compliant.
So, the next time you check your gst on electricity bill, remember — the main electricity charge is exempt, but it’s smart to watch for GST on any extra services or equipment.
