GST and battery manufacturing industry
Goods and Services (GST) Tax is a single tax on the goods and services from the manufacturer to the buyer. GST was introduced to bring equality in the prices of products across the country. The GST council has placed over 500 services and 1300 goods and under the tax slabs of 5%, 12%, 18% and 28%.
Batteries are classified under the tariff head 8506 and 8507 of the First Schedule of the Tariff Act. The basic difference between the two tariff heads is the ability of the accumulator to be recharged. An accumulator is an energy storage device, which accepts energy and stores it. The tariff head 8506 mentions the primary cell batteries. Primary cell batteries cannot be recharged. Therefore, the UPS is classified under Tariff head 8504. UPS is a device that provides power backup in case of emergency when the input power source or mains fail. The on-battery runtime of most UPS is relatively short. It is typically used to protect hardware such as telecommunication equipment, computers, data centers, or other electrical equipment where an unexpected power disruption could cause data loss or injuries.
The supply of UPS and Battery is a Mixed Supply based on Section 2(74) of the GST Act, as they are supplied at a combined single price under a single contract. Mixed supply, under section 2(74) of the GST Act, is defined as one where two or more individual supplies of goods or services, made in concurrence with each other by a taxable person for a single price where such supply does not constitute a mixed supply.
The tariff head for the UPS will be 8504 under serial no. 375 of Schedule III in terms of Notification No. 01/2017-Central Tax (Rate) dated 28/06/2017 .
GST rates of UPS and inverters in India
The GST rates for UPS and inverters are mentioned under the section 16 HS code section in the chapter 85.Chapter 85 deals with the machinery and mechanical appliances, television image and sound recorders and reproducers, electrical equipment, sound recorders and reproducers, and parts and accessories of such particles. To Know more about GST click here, https://www.business-standard.com/article/economy-policy/govt-clarifies-gst-confusion-on-solar-70-project-cost-under-5-rate-118122200632_1.html
Chapter 85 also includes section code 8507 which mentions the product; electric accumulators,including separators therefore,whether or not rectangular (including square).
GST rates for inverters
- The GST rate of the Transformers Industrial Electronics; Electrical Transformer; Static Convertors (UPS) is 18%.
- The GST rate of Static converters and inductors other than transformers Industrial Electronics and Static Convertors is 18%.
- The GST rate for Lithium-ion batteries with HS code 8507 is 18%.The products included in the description are Lead-acid, other lead-acid accumulators,Nickel cadmium, Nickel-metal hydride, Nickel-iron, Li-ion,other accumulators,Battery separators,accumulator cases made of hard rubber and separators and others
- The GST rate for Lithium-ion accumulators (other than battery) including lithium-ion power bank is also 18%
The validity of the above information about the GST rate must be verified before any business dealings.