GST on Battery: Applicability, Rate and HSN Code
Updated: Oct 29
In India, the Goods and Services Tax (GST) is applicable on almost every product and service, including batteries. This blog discusses the GST applicability, rates, and HSN codes for different types of batteries, along with details on e-way bills, invoicing, and input tax credit (ITC) on batteries.
Whether you are dealing with inverter batteries, UPS batteries, or car batteries, understanding the correct GST rate and HSN code is crucial to ensuring compliance and maximizing tax benefits.
Table of Content
Applicability of GST on Battery
GST is applicable to all kinds of batteries sold in India, whether they are used in automobiles, inverters, UPS systems, or other devices. Batteries are classified under different HSN (Harmonized System of Nomenclature) codes, and the GST rate varies based on the type of battery. Businesses must correctly categorize batteries and apply the applicable GST rate to ensure compliance with tax regulations.
Categories of Batteries Under GST:
Lead-acid batteries (used in cars, inverters, and UPS)
Lithium-ion batteries (used in electric vehicles and gadgets)
Other types of batteries (e.g., solar batteries)
Specifics:
Inverter Battery GST: Inverter batteries, which are essential for power backup solutions, fall under specific HSN codes and are taxed accordingly.
Car Battery GST: Car batteries, typically lead-acid, also come under particular tax brackets.
Businesses involved in the sale or purchase of batteries need to be aware of these details to avoid incorrect GST filing or penalties.
GST Rate and HSN Code for Different Battery Types
Different batteries are classified under specific HSN codes, and the GST rate varies based on their classification. Here's a breakdown of the most common batteries:
Battery Type | HSN Code | GST Rate |
Lead-acid battery (including inverter battery) | 8507 | 18% |
Lithium-ion battery | 8507 | 18% |
Exide battery | 8507 | 28% |
UPS battery | 8507 | 18% |
Inverter Battery HSN Code and GST Rate
Inverter batteries fall under HSN Code 8507 and are subject to an 18% GST rate. This applies to both lead-acid and lithium-ion types used in backup power systems.
Exide Battery HSN Code and GST Rate
Exide batteries, a popular brand in India, fall under HSN Code 8507. Depending on the specific model, the GST rate may vary, but most Exide batteries carry a 28% GST rate.
GST on Car Batteries
For car batteries, which are predominantly lead-acid batteries, the HSN code is 8507, and they attract an 18% GST rate.
Battery HSN Code and GST Rate
The general HSN code for most battery types is 8507, and the GST rate commonly applied is 18%. It's important for businesses to check if their specific battery falls into any special category that might alter the rate.
E-way Bills for Battery Transport
The movement of batteries between states or over certain distances requires the generation of an e-way bill. The threshold for e-way bills applies to consignments valued at more than INR 50,000. Here are the key points to note:
Mandatory for interstate movement of batteries.
Required for consignment exceeding INR 50,000 in value.
Must include the HSN code and GST rate applicable to the battery being transported.
Failure to generate an e-way bill when required can result in penalties and disruption in the transportation of goods.
Invoicing Requirements for Battery Sales
Invoices for battery sales must comply with GST regulations. The invoice should contain:
The correct HSN code for the battery type.
The GST rate applied (e.g., 18% or 28%).
The total taxable value of the goods.
GSTIN of both the buyer and the seller.
Proper invoicing ensures transparency and accuracy in GST filings, preventing future disputes or penalties.
Input Tax Credit (ITC) on Batteries
One of the benefits of the GST system is the availability of Input Tax Credit (ITC). Businesses that purchase batteries for resale or use in their operations can claim ITC on the GST paid at the time of purchase. However, to avail of ITC, certain conditions must be met:
The batteries must be used for business purposes.
The supplier must have correctly filed the GST returns.
A valid invoice showing the GST charged on the batteries is essential.
ITC is not available if the batteries are used for personal purposes or are part of exempt supplies. Proper documentation and accurate record-keeping are key to ensuring smooth ITC claims.
TaxBuddy Services for GST and Tax Compliance
TaxBuddy offers comprehensive GST and tax compliance solutions to businesses dealing in batteries and related products. Our services include:
GST filing and returns tailored to battery sales.
Assistance with e-way bill generation and compliance.
Input Tax Credit (ITC) optimization, ensuring you maximize your tax benefits.
Expert invoicing solutions to comply with GST rules.
Customized support for resolving any tax-related issues.
With TaxBuddy, you can ensure your business complies with all GST regulations, avoids penalties, and maximizes available benefits.
FAQ
Q1. What is the GST rate on inverter batteries?
The GST rate on inverter batteries is 18%. These fall under HSN Code 8507.
Q2. Can I claim ITC on batteries purchased for resale?
Yes, if the batteries are purchased for resale or for use in the business, you can claim Input Tax Credit (ITC).
Q3. Is GST applicable to car batteries?
Yes, car batteries are subject to GST. The GST rate is 18%, and they fall under HSN Code 8507.
Q4. What is the HSN code for Exide batteries?
Exide batteries typically fall under HSN Code 8507. Most Exide models attract a 28% GST rate.
Q5. Do I need to generate an e-way bill for battery transportation?
Yes, if the consignment value exceeds INR 50,000, an e-way bill is required for transporting batteries.
Q6. What are the invoicing requirements for battery sales under GST?
Invoices must include the HSN code, applicable GST rate, taxable value, and GSTIN of both parties.
Q7. Is GST on lithium-ion batteries the same as lead-acid batteries?
Yes, both lithium-ion and lead-acid batteries generally attract an 18% GST rate under HSN Code 8507.
Q8. What happens if I apply the wrong GST rate on a battery sale?
Incorrect application of GST rates can lead to penalties and additional tax liability. It's crucial to apply the correct rate.
Q9. How do I determine the correct HSN code for a battery?
The HSN code for batteries, generally 8507, can be verified based on the type of battery and its specific use case.
Q10. Is GST applicable to batteries used in renewable energy systems?
Yes, batteries used in renewable energy systems like solar energy solutions are also subject to GST.
Comments