New GST on Electricity: Is It Covered Under GST?
- Electricity itself is not covered under GST, as it is considered a basic necessity.
- Services related to electricity, like installation or maintenance, may be taxed at 18% GST.
- Electronic items such as fans and inverters are subject to GST, generally at 18%.
- Private electricity supply, like from generators, may attract 18% GST as a service.
- Residential electricity bills are GST-exempt, but commercial users may pay GST on additional service charges.
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.
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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
It’s important not to confuse electricity with electronic items. Products like fans, refrigerators, and inverters are subject to GST.
| Product Type | New GST Rate |
|---|---|
| Household appliances (fans, mixer-grinders, refrigerators, etc.) | 18% |
| Air conditioners (all types, incl. inverter) | 18% |
| LED lights & luminaires (general lighting) | 5% |
| Inverters & UPS systems | 18% |
Product Type
New GST Rate
Product Type
New GST Rate
Product Type
New GST Rate
Product Type
New GST Rate
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.
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What About Electricity-Related Services?
Even though electricity itself is exempt, services related to electricity may attract GST. Here’s how:
- Installation and Maintenance: Electrical wiring, transformer setup, or repair work may be taxed at 18% GST.
- Electricity Connection Charges: Utility companies may charge for new connections or upgrades — these may also attract GST.
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Old GST on Electronic Items
(Old GST Rates – Applicable Until 21st September)
It’s important not to confuse electricity with electronic items. Products like fans, refrigerators, and inverters are subject to GST.
| Product Type | Approximate GST Rate |
|---|---|
| Household Appliances | 18% |
| Air Conditioners | 28% |
| LED Lights | 12% |
| Inverters & UPS systems | 18% |
Product Type
Approximate GST Rate
Product Type
Approximate GST Rate
Product Type
Approximate GST Rate
Product Type
Approximate GST Rate
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What About the GST on Electricity Bills for Businesses?
- Electricity bills from government-authorized providers remain exempt from GST.
- Private supply, generator power, or DG set rentals may attract GST at applicable rates (usually 18%).
So, while gst on electricity bill doesn’t apply for normal usage, Input Tax Credit can still be claimed on related services if used for business purposes.
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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.
