On January 26, the Ministry of Finance and the State Administration of Taxation released the Circular on Imposing Consumption Tax on Batteries and Coatings (the "Circular"), specifying that batteries and coatings shall be subject to consumption tax from February 1, 2015.
The Circular indicates that consumption tax shall be imposed on batteries and coatings, and shall be levied in the processes of production, commissioned processing, and importation of batteries and coatings at the rate of 4%. The scope of taxable batteries include: primary batteries, storage batteries, fuel batteries, solar batteries and other batteries, while mercury-free batteries, nickel-metal hydrogen storage batteries, lithium primary batteries, lithium-ion batteries, solar batteries, fuel batteries, and vanadium redox batteries shall be exempted from consumption tax. The Circular also points out that lead storage batteries shall be temporarily exempted from consumption tax prior to December 31, 2015, and consumption tax shall be imposed on lead storage batteries at the rate of 4% from January 1, 2016.