Circular on Imposing Consumption Tax on Batteries and Coatings

Circular on Imposing Consumption Tax on Batteries and Coatings

Cai Shui [2015] No.16

January 26, 2015

Finance departments (bureaus) and local offices of the State Administration of Taxation of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan and the Financial Bureau of Xinjiang Production and Construction Corps,

To promote energy conservation and environmental protection, upon the approval of the State Council, consumption tax will be imposed on batteries and coatings as of February 1, 2015. The relevant matters are hereby notified as follows:

Article 1 Batteries and coatings shall be subject to consumption tax (see appendices for notes to specific tax items), which will be imposed in the processes of production, consigned processing and import at the applicable rate of 4%.

Article 2 Primary mercury-free batteries, nickel-metal hydride batteries (also known as "Ni-MH batteries" or "MH-Ni batteries"), lithium primary batteries, lithium-ion batteries, solar batteries, fuel cells and all-vanadium redox flow batteries are exempted from consumption tax.
Lead storage batteries shall be temporarily exempted from consumption tax prior to December 31, 2015; and as of January 1, 2016, consumption tax will be imposed on lead storage batteries at the rate of 4%.
Coatings with contents of Volatile Organic Compounds (VOC) under construction state less than 420 g/l (inclusive) are exempted from consumption tax.

Article 3 Except for the above provisions, other matters on administration of consumption tax collection on batteries and coatings shall be subject to the Interim Regulations of the People's Republic of China on Consumption Tax, the Implementing Rules of the Interim Regulations of the People's Republic of China on Consumption Tax and other relevant provisions.

Appendix I: Notes to the Scope of Batteries Subject to Consumption Tax

Battery is a device that transforms chemical energy, luminous energy and other energies directly into electrical energy, a basic functional cell generally consisting of electrodes, electrolytes, containers, terminals and usually isolation layers, and a battery pack assembled with one or more basic functional cells.
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