Understanding Goods and Services Tax on Batteries: Rates, HSN Codes, and Applicability
This article elucidates the Goods and Services Tax (GST) implications for various types of batteries in India. It covers the conditions determining GST applicability, requirements for e-way bills and invoicing, and the classification of batteries under Harmonized System of Nomenclature (HSN) codes with their corresponding GST rates. Furthermore, the document outlines the criteria for claiming Input Tax Credit (ITC) on battery purchases, ensuring businesses understand their tax obligations and benefits.
Goods and Services Tax (GST) is an indirect tax applied to goods and services throughout its value chain. This tax also applies to battery supplies. This document provides essential information regarding GST on batteries, covering applicable rates, HSN codes, input tax credit availability, and potential exemptions for various battery types, including those used in cars, mobile phones, and laptops.
Applicability of GST on Batteries
General Applicability
Determining the GST application for batteries involves considering the battery type, its intended use, and the location of the supply. Currently, most battery categories, such as lead-acid and lithium-ion batteries, are subject to GST. The specific GST rate is contingent on both the battery's type and its application.
Electronic Way Bills (E-way Bills)
To counteract tax evasion, the government mandates e-way bills for transporting goods domestically. Consequently, if a battery consignment's value surpasses Rs. 50,000 (per invoice, bill, or delivery challan), suppliers must generate an e-way bill for interstate and intrastate movement within India. These documents can be produced online.
Supply Location
The concept of "place of supply" refers to the point where goods or services are provided or utilized. For intrastate battery sales, both State GST (SGST) and Central GST (CGST) are imposed. For interstate transactions, Integrated GST (IGST) applies. The specific GST type for batteries is determined by the supplier's location, the recipient's location, and the battery's nature.
Invoicing Requirements
Invoices for battery sales must detail the GST registration numbers of both the supplier and the recipient, along with the battery type, quantity, value, and the relevant GST rate. Furthermore, the Harmonized System of Nomenclature (HSN) code for the batteries must be included on the invoice.
GST Rates and Harmonized System of Nomenclature (HSN) Codes for Batteries
Presented below is a table detailing the GST rates and corresponding HSN codes for various batteries and cells in India:
| Product | HSN Code | GST Rate |
|---|---|---|
| Primary cells and Primary batteries | 8506 | 18% |
| Lead-Acid accumulators | 8507 | 28% |
| Nickel-Cadmium accumulators | 8507 | 28% |
| Lithium-ion batteries | 8507 | 18% |
| Lithium-ion accumulators (other than batteries), including lithium-ion power banks | 8507 | 18% |
| Waste and scrap of primary cells, primary batteries, and electric accumulators | 8548/8549 | 18% |
It is crucial for battery manufacturers to stay informed about the most current GST rates, as these rates are subject to periodic revisions.
Input Tax Credit (ITC) Eligibility for Batteries
In India, Input Tax Credit (ITC) can be claimed on batteries, provided specific criteria are met. Businesses are eligible to claim ITC on the GST paid for batteries acquired for operational purposes. However, ITC is not permissible for batteries used in producing exempt goods or for personal consumption. Furthermore, batteries must be procured from a GST-registered vendor, and the purchase must be documented with a compliant invoice featuring the supplier's GST registration number. The full list of conditions for claiming input tax credit on batteries is available here.