Updated on July 07, 2025 11:55:13 AM
Batteries are classified under Goods and Services Tax (GST) in specific tax categories, which means that depending on the kind of battery, it can fall into varying tax types and rates. Batteries are used in many different industries, from electronics to automobiles, and the industries that use batteries have different GST rates and HSN codes.
GST on batteries is focused mainly on the type of battery. Batteries can be used in many different situations, such as batteries in electric vehicles, batteries that are lead-acid, and most common types of batteries have different GST treatments. Overall, GST on batteries ranges from 18% to 28%, depending on battery type and/or usage.
One of the very important aspects of GST compliance is classifying the correct HSN code for batteries. HSN Codes help classify goods for GST purposes and make sure the right GST rate is paid. HSN Code 8507 is the typical HSN Code used for electric accumulators (batteries).
Businesses that handle batteries need to become more familiar with the GST rate as well as the HSN Code to ensure proper tax payments, comply with GST, and avoid penalties. Companies that import, manufacture, or sell batteries should pay attention to this information to better manage their tax calculation and reporting.
The Goods and Services Tax (GST) is a single indirect tax that will be charged on the supply of goods and services across India. Due to their wide use in every industry, from automobiles, electronics, to power backup systems and electric vehicles, batteries are taxable items under the GST regime. The GST rates on batteries will depend on the battery type, usage, and the battery material. For example, while the standard lead-acid batteries and lithium-ion batteries are taxed at 18% or 28% tax rates, some batteries used for electric vehicles could be subjected to a lower GST rate.
The RMOTY has lowered GST on EV batteries, as these will promote green energy and reduce pollution levels. Generally, industrial or automotive batteries have GST rates under the higher tax brackets of 28%. The GST rates will differ for each battery type since the supply of goods will have an assigned HSSN (Harmonized System of Nomenclature) code, with HSSN 8507 the most commonly used code for accumulators and rechargeable batteries.
The GST rate on batteries in India varies depending on the type, use, and composition of the battery. Below is a breakdown of common battery types and their applicable GST rates:
| Battery Type | HSN Code | Usage/Application | GST Rate |
|---|---|---|---|
| Lead-Acid Batteries | 8507 | Automotive, inverters, and industrial use | 28% |
| Lithium-Ion Batteries | 8507 | Mobile phones, laptops, and electric vehicles | 18% |
| Dry Cell Batteries | 8506 | Remote controls, flashlights, toys | 18% |
| Electric Vehicle (EV) Batteries | 8507 | Power source for electric vehicles | 5% |
| Solar Batteries | 8507 | Renewable energy systems | 5% (when sold with solar systems) |
| Zinc Carbon Batteries | 8506 | General household electronics | 18% |
| Nickel-Cadmium (NiCd) Batteries | 8507 | Power tools, emergency lighting | 18% |
Batteries that are utilized in electric vehicles (EVs) are a key part of India's green mobility agenda. The government seeks to encourage the uptake of green transport, and has introduced a concessional Goods and Services Tax (GST) rate for the batteries in the same way as they have for the EVs. However, this concessional sales GST only applies when a new EV is sold, as opposed to when an EV battery is sold separately.
If an EV battery is sold with an electric vehicle, it will attract a lower GST rate of 5%. The government considers that lower GST rates will make the electrification of transport less expensive for the public. When standalone or replacement, EV batteries are sold, they will attract a higher GST rate of 18%. This variance in GST taxation is important considering the price adjustment, tax planning, and budgeting considerations. The broad categorization for an EV battery is under HSN Code 8507 (electric accumulators, which include lithium-ion and any other rechargeable battery).
The implementation of the Goods and Services Tax (GST) has transformed battery pricing in India. Unlike before, when batteries were subjected to different taxes from state to state, like VAT and excise duty, one tax has replaced all of those taxes and streamlined the battery market.
The GST for most standard types of batteries, such as lead-acid and dry cell batteries, is 28%, which is relatively high. End-consumers are paying a bit higher in price, especially with automotive batteries and inverter batteries. Compared to batteries, like lithium-ion, which are primarily used in mobile phones and electronic gadgets, they have an 18% GST, which helped keep the pricing in check.
EV batteries have seen a positive change. When sold with a vehicle, they count as 5% GST, resulting in the prices of electric vehicles being lower due to these taxes, encouraging greener options for consumers. Unfortunately, if someone is buying a replacement autonomous battery from an independent seller, they would be charged 18%.
Conclusion
It is important to understand the GST architecture surrounding batteries, particularly in the case of manufacturers, suppliers, and consumers. With the different tax rates for different battery types, for example, 5% for EV batteries when sold as part of a vehicle versus 28% for standard lead-acid batteries, proper classification using HSN codes, for compliance and pricing consideration, becomes paramount. GST may have provided a uniform GST structure, appropriate compliance and tax planning, with transparency in the battery market as a whole, but a high GST rate in certain battery types can have consequences on overall prices.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions (FAQs)
Lead-acid batteries are subject to a GST rate of 28% under HSN code 8507.
Lithium-ion batteries are generally under 18% GST, which applies to mobile phones, laptops, and other electronics.
Batteries, including rechargeable and EV batteries, mostly fall under HSN code 8507. Dry cell batteries may fall under HSN 8506.
Yes, EV batteries sold with electric vehicles are subject to 5% GST, while stand-alone EV batteries are subject to 18% GST.
Yes, businesses that are GST-registered can claim Input Tax Credit for battery purchases as long as they are used for business purposes.
Solar batteries sold separately are subject to 18% GST. However, solar batteries sold as part of the solar power generating system may qualify for a concessional rate of 5%.
The different GST rates are based on battery type, usage, and battery classification in order to promote green energy (in particular, EVs) and to draw a distinction between industrial and consumer use.
No. Separate EV batteries are taxed at 18% GST regardless of their intended use in an electric vehicle. The 5% rate is only applicable when sold with the EV.
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