GST Rate for Mobile Batteries Based on End-Use
Mobile batteries sold to handset manufacturers attract 12% GST, while other sales are taxed at 28%.
- Ruling
- Advance Ruling No. 2, dated 26.03.2018
- Dated
- 26 Mar 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Batteries sold to phone makers qualify as parts for mobile manufacturing.
- These specific parts attract a lower GST rate of 12%.
- Batteries sold to other customers are classified as electric accumulators.
- General sales of these batteries attract a higher GST rate of 28%.
In short
The company asked the Authority for Advance Ruling (AAR) whether mobile batteries should be taxed differently depending on who buys them. The authority decided that the intended use of the battery determines its tax category and rate.
What has changed
How it worked before
Businesses were often uncertain if the tax rate for mobile batteries depended on the buyer's identity or the product's general classification.
What has changed
The authority ruled that batteries sold to mobile manufacturers are 'parts for telephones' at 12% GST, while all other sales are 'electric accumulators' at 28% GST. This means your tax liability depends on whether your customer is a phone manufacturer using the part for production.
Who this affects
Manufacturers and suppliers of lithium-ion batteries for mobile handsets.
An example
A battery supplier sells units to a smartphone factory and also to a local repair shop. Based on this ruling, the supplier should charge 12% GST on the batteries sold to the factory. The batteries sold to the repair shop must be taxed at 28% because they are not being used for original mobile handset manufacturing.
What you should do
Review your customer list and sales contracts to confirm if your buyers are mobile handset manufacturers. Note that an Advance Ruling is only binding on the company that asked and its specific tax office; it is not a general law for all businesses.
If you do nothing
If you apply the 12% rate to all sales, you risk a tax demand for the 16% difference plus interest and penalties. A tax officer may disagree with your classification during an audit, leading to costly disputes. Always verify your specific classification with your own tax advisor.
The terms explained
- Electric accumulators
- A technical term for devices that store electrical energy, commonly known as rechargeable batteries.
- Advance Ruling
- A formal decision provided by tax authorities to a business regarding the tax treatment of a specific transaction.
- End-use based classification
- A method where the tax rate of a product is determined by how the buyer intends to use it.
The ruling in detail
Authority for Advance Ruling
M/s Epcos India Pvt. Ltd.
Advance Ruling No. 2, dated 26.03.2018 · Haryana
Questions before the authority
- Whether the product 'Battery for Mobile Handset' whether it be separable or non-separable i.e., whether it be detachable or non-detachable, when sold to the mobile handset manufacturers who uses the same to make it form part of the mobile handset, will qualify to be classified under heading-85 having description 'Parts for manufacture of Telephones for cellular networks or for other wireless networks' attracting GST Rate of 12% (CGST rate 6%, SGST rate 6%, IGST rate 12%) as mentioned under Serial No. 203 of Schedule II of the Notification No. 1/2017 Central Tax (Rate) dated 28 June, 2017, Serial No. 203 of Schedule II of the Notification No. 35/ST-2 dated 30th June, 2017 issued under Haryana Goods and Services Tax Act, 2017 and Serial No. 203 of Schedule II of the Notification No. 1/2017 Integrated Tax (Rate) dated 28 June 2017.
- Whether the product 'Battery for Mobile Handset' whether it be separable or non-separable i.e., whether it be detachable or non-detachable, when sold to the customers other than mobile handset manufacturers who does not use the same in manufacture of mobile handset, will qualify to be classified under heading-8507 having description 'Electric accumulators, including separators therefore, whether or not rectangular (including square)', attracting GST Rate of 28% (CGST rate 14%, SGST rate 14%, IGST rate 14%) as mentioned under Serial No. 139 of Schedule IV of the Notification No. 1/2017 Central Tax (Rate) dated 28 June 2017, Serial No. 139 of Schedule IV of the Notification No. 35/ST-2 dated 30th June, 2017 issued under Haryana Goods and Services Tax Act, 2017 and Serial No. 139 of Schedule IV of the Notification No. 1/2017 - Integrated Tax (Rate) dated 28 June 2017.
Facts
The applicant manufactures lithium-ion batteries for mobile handsets. They sought a ruling on the classification and GST rate for these batteries when sold to mobile handset manufacturers for integration into phones versus when sold to other customers.
Ruling
| Question | What the authority ruled |
|---|---|
| Battery sold to mobile handset manufacturers | Classified under heading 85, attracting 12% GST (6% CGST, 6% SGST, 12% IGST) per S.No. 203 of Schedule II. Applicable when used to make it form part of the mobile handset. |
| Battery sold to other customers | Classified under heading 8507, attracting 28% GST (14% CGST, 14% SGST, 14% IGST) per S.No. 139 of Schedule IV. Applicable when not used in the manufacture of mobile handsets. |
The Authority ruled that batteries sold to mobile handset manufacturers for use in production are classified as parts for the manufacture of telephones, attracting a 12% GST rate. Conversely, batteries sold to other customers are classified as electric accumulators under heading 8507, attracting a 28% GST rate.
Reasoning
The Authority applied the **Rules for Interpretation of the Customs Tariff Act**, specifically Rule 3, to determine the most specific heading. It concluded that while lithium-ion batteries generally fall under heading 8507, those specifically intended for use as parts in the manufacture of mobile handsets are more appropriately classified under the specific entry for parts of telephones under heading 85. The ruling relies on the distinction between the end-use of the product by the purchaser.
Provisions relied on
- Section 97(2) of the CGST/HGST Act, 2017
- Section 98 of the CGST/HGST Act, 2017
- Notification No. 1/2017 Central Tax (Rate) dated 28 June 2017
- Notification No. 35/ST-2 dated 30th June 2017
- Notification No. 1/2017 Integrated Tax (Rate) dated 28 June 2017
- Customs Tariff Act, 1975
For the practitioner
This ruling provides clarity on the **end-use based classification** of mobile batteries. It helps manufacturers confirm that supplying batteries to handset makers qualifies for the lower 12% rate, whereas retail or non-manufacturing sales remain subject to the higher 28% rate.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/haryana-ar_02_2017-18_dt.26.03.18_eipl.pdf
Legibility of the scan, as read: high.
Prepared 16-10-2026.
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