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  7. GST on Battery: Applicability, Rate and HSN Code

GST on Battery: Applicability, Rate and HSN Code

Updated on: 30 May, 2024 05:58 PM

GST is a comprehensive tax in India that has replaced multiple taxes that used to be levied on various goods and services and simplified the overall indirect taxes. Understanding the GST is important for businesses that are dealing in batteries, as it determines the tax liability on their purchase and sale. In this guide, we will explain how GST applies to batteries in India, covering the relevant rates, HSN codes, and other essential considerations.

Contents

Applicability of GST on Battery

The applicability of GST on battery depends on three key factors:

  • Type of Battery: Different battery types have varying HSN codes (Harmonized System Nomenclature) under GST, leading to different tax rates. For example, lithium-ion batteries used in electronics attract a different rate than lead-acid batteries used in vehicles.
  • Place of Supply: The location where the battery is delivered determines the type of GST applicable. If the supply happens within the same state, Central GST (CGST) and State GST (SGST) will be levied. However, for interstate supplies, Integrated GST (IGST) applies.
  • Use of the Battery: The intended use of the battery can also influence GST applicability. For instance, batteries used for industrial purposes might have different tax treatment compared to those used for personal consumption.

GST Rate and HSN Code for Different Battery Types

As mentioned earlier, the GST rate on battery depends on their classification under the Harmonized System of Nomenclature (HSN). HSN codes are six-digit identifiers used internationally to categorize goods for customs and trade purposes.

Here's a table outlining common battery types, their corresponding HSN codes, and the applicable GST rate on battery in India:

Battery Type HSN Code GST Rate
Primary cells and primary batteries (non-rechargeable, like AA, AAA, C, D, button cells) 8506 18%
Lithium-ion batteries (used in laptops, mobiles, tablets, power banks) 8507 18%
Lead-acid accumulators (used in vehicles, inverters, UPS) 8507 28%
Nickel-Cadmium accumulators 8507 28%

E-way Bills

When transporting batteries, e-way bills are mandatory if the consignment value exceeds ₹ 50,000 within a state or for inter-state movement. This electronic document facilitates tracking and prevents tax evasion.

Invoicing Requirements

Businesses must issue proper invoices for battery sales, including mandatory details like:

  • Seller and buyer information
  • Description of the battery (including HSN code)
  • Taxable value
  • Applicable GST rate on battery and amount

Input Tax Credit available on Batteries

Businesses registered under GST can claim ITC on taxes paid for batteries purchased for business purposes. However, this is subject to conditions like filing GST returns and possessing valid invoices with the correct HSN code.

Frequently Asked Questions

Q- What is GST on inverter battery?

Inverter batteries, along with UPS batteries (static converters), fall under HSN code 8507 and attract a GST rate of 18% in India.

Q- What is GST rate on UPS battery?

As mentioned above, UPS batteries are categorized under HSN code 8507 and incur a GST rate of 18% in India.

Q- What is GST on car battery?

The GST rate on car batteries depends on the type of battery used. Lithium-ion car batteries fall under HSN code 8507 with a GST rate of 18%. However, most car batteries are lead-acid accumulators, classified under the same HSN code (8507) with a higher GST rate of 28%.

Q- What is HSN code 85072000?

HSN Code 85072000: Lead-acid electric accumulators, including their separators, whether or not rectangular (including square).

Q- Is battery GST rate 18 or 28?

The GST rate on lithium-ion batteries is 18%, whereas other secondary batteries and electric accumulators are subject to a GST rate of 28%.

Q- What is the HSN code for Exide battery?

The HSN code for an Exide battery varies based on the type of battery. For instance, the HSN code for an Exide car battery is 85071010, while the HSN code for an Exide inverter battery is 85072000.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.