GST Rate and HSN Code for Electrical Parts and Electronics

The Goods and Services Tax (GST) regime in India has brought about a unified tax structure, impacting various sectors, including the electrical and electronics industry. Knowing about the Harmonized System of Nomenclature (HSN) codes and the corresponding GST rates for electrical parts and electronics is important for manufacturers, suppliers, and consumers. Chapter 85 of the HSN code specifically addresses "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles. This article delves into the GST rates applicable to a wide array of electrical parts and electronic items, referencing the HSN codes under Chapter 85 and other relevant chapters.  

Chapter 85 of the HSN Code

Chapter 85 of the HSN code is extensive, covering a broad spectrum of electrical and electronic goods. It includes everything from electric motors and generators to household appliances, sound recording and reproducing apparatus, and television image and sound recorders. The detailed classification within this chapter allows for precise determination of the applicable GST rate for specific items.  

GST Rate Structure for Electrical Parts & Electronics

The GST rates for electrical parts and electronics in India are categorized under several slabs: 5%, 12%, 18%, and 28%. The rate applicable to a specific item depends on its nature and intended use.

5% GST Rate

Several electrical and electronic items, particularly those related to renewable energy and certain components, fall under the 5% GST rate. This lower rate aims to promote environmentally friendly options and support specific industries. Some examples include:  

• Electric vehicles (EVs): HSN code 87. This lower rate encourages the adoption of sustainable transportation.

• Chargers for electric vehicles: HSN code 8504. Essential for the functioning of EVs.

• Solar power-based devices: HSN codes within Chapters 84, 85, and 94. This includes solar panels, solar generators, and related equipment, promoting the use of clean energy.

• Biogas plants: HSN codes within Chapters 84, 85, and 94. Supports the development of renewable energy sources from organic waste.  

• Wind turbines and wind-powered generators: HSN codes within Chapters 84, 85, and 94. Encourages the harnessing of wind energy.

• Parts suitable for use solely or principally with electric motors and generators, electric generating sets and rotary converters, not elsewhere specified (n.e.s.): HSN code 1404 9050. This covers specific components used in essential electrical machinery.  

• Parts of signaling/traffic control equipment: HSN code 1514 9110. Includes items like buzzers and electrical actuators used in safety systems.

• Electrical capacitors, fixed, variable or adjustable "pre-set"; parts thereof: HSN code 1514 9120. Certain fundamental electronic components.

• Other parts for various machinery and equipment, including those for aircraft engines, pumps for liquids, and turbo-jets/turbo propellers: Various HSN codes under Chapters 12, 14, and 15. This highlights that specific parts used in broader industrial applications may also attract a lower GST rate.

• Routers: HSN code 1702 6090. Essential for internet connectivity.

12% GST Rate

Certain electrical and electronic items that are considered important but not necessarily basic necessities fall under the 12% GST rate. Examples include:

• Solar water heater and system: HSN code 8419 12. Encouraging the use of solar energy for heating water.

• Bio-gas plants: HSN codes within Chapters 84, 85, and 94.

• Solar-powered devices (other than those at 5%): HSN codes within Chapters 84, 85, and 94.

• Solar power generators (other than those at 5%): HSN codes within Chapters 84, 85, and 94.

• Windmills, Wind Operated Electricity Generators (WOEG) (other than those at 5%): HSN codes within Chapters 84, 85, and 94.

• Waste to energy plants/devices (other than those at 5%): HSN codes within Chapters 84, 85, and 94.

• Solar lantern/solar lamp (other than those at 5%): HSN codes within Chapters 84, 85, and 94.

• Ocean waves/tidal waves energy devices/plants: HSN codes within Chapters 84, 85, and 94.

• Photo voltaic cells: HSN codes within Chapters 84, 85, and 94.

• Instruments used in surgical, medical, dental, or veterinary sciences: HSN code 9018. Essential for the healthcare sector.  

• Electrical transformers, static converters, and inductors; parts thereof: HSN code 1501 00. This category covers important power regulation components.

• Wet grinder consisting of stone as a grinder: HSN code 8509. A specific type of kitchen appliance.

• Mobile phones (both new and used): HSN code 8517.

18% GST Rate

A significant portion of electrical and electronic goods falls under the 18% GST rate. This includes many common household appliances, industrial equipment, and electronic components. Some examples are:

• Refrigerators: HSN code 8418. Considered standard household appliances.  

• Television sets up to 32 inches: HSN code 8528. Differentiated by size, larger TVs fall under a higher rate.

• Mobile phones (as per some classifications): HSN code 8517.

• Printers: HSN code 8443. Essential for both home and office use.

• Electrical capacitors (other than those at 5%): HSN code 8532.

• Electrical resistors: HSN code 8533.

• Vacuum cleaners: HSN code 8508.

• Electric smoothing irons/Electric water heaters/Hair dryers: HSN code 8516. Common household appliances.

• Electrical lamps: HSN code 8539. Essential for lighting.

• Microphones, loudspeakers, headphones, and earphones: HSN code 8518. Audio equipment for communication and entertainment.

• Cameras: HSN codes 9006-9007. Imaging devices.

• Electrical transformers, static converters (UPS) (as per some classifications): HSN code 8504.

• Closed-circuit television (CCTV): HSN codes 8525 or 8806. Security and surveillance equipment.

• Electrical insulators: HSN code 8546. Crucial for electrical safety.

• Household or laundry washing machines: HSN code 8450. Standard household appliances.

• Water purifiers: HSN code 8421. Important for access to clean drinking water.

• Laptops and computers: HSN code 8471. Essential for work, education, and communication.

• Electric motors and generators (excluding generating sets): HSN code 8501. Fundamental components for various machinery.

• Electric generating sets and rotary converters: HSN code 8502. Power generation equipment.

• Electro-magnets: HSN code 8505. Used in various industrial and electronic applications.

• Lighting or signaling equipment (e.g., windscreen wipers): HSN code 8512. Automotive and safety equipment.

• Machines for welding, soldering, etc.: HSN code 8515. Industrial machinery.

• Industrial furnaces and ovens: HSN code 8514. Industrial heating equipment.

• Electric traffic control equipment: HSN code 8530. Essential for transportation safety.

• Sound-signalling or visual-signalling apparatus (e.g., bells): HSN code 8531. Safety and communication devices.

• Electrical circuit parts (e.g., switches, relays): HSN codes 8535 or 8536. Fundamental electrical components.

• Apparatus for distribution of electricity (e.g., panels): HSN code 8537. Essential for power management.

• Electric conductors: HSN code 8544. Wires and cables for electricity transmission.

• Electric musical instruments: HSN code 9207. Electronic musical devices.

• Electric padlocks and locks: HSN code 8301. Security devices.

• Parts suitable for use solely or principally with the machines of heading 8501 or 8502: HSN code 8503. Components for electric motors and generators.

• Static converters (for example, rectifiers) and inductors, Electrical transformers (other than those specifically mentioned): HSN code 8504.

• Vacuum i.e. vacuum cleaners: HSN code 8508.

• Electro-mechanical domestic appliances, with self-contained electric motor, other than vacuum cleaners of heading 8508: HSN code 8509.  

• Shavers, hair clippers and hair-removing appliances, with self-contained electric motor: HSN code 8510. Personal care appliances.

• Parts of electrical ignition or starting equipment, generators, etc. of heading 8511, n.e.s.: HSN code 8511 90. Components for internal combustion engines.

• Parts of electrical signalling, safety or traffic control equipment, n.e.s.: HSN code 8530 90. Components for safety systems.

• Parts of electronic integrated circuits, n.e.s.: HSN code 8542 90. Components for electronic circuits.

• Parts of electrical machines and apparatus, having individual functions, n.e.s. in chapter 85: HSN code 8543 90. Components for specialized electrical equipment.

• Electrical parts of machinery or apparatus, not specified or included elsewhere in chapter 85: HSN code 8548 90. Miscellaneous electrical components.

• Parts and accessories for instruments and apparatus for measuring or checking electrical quantities or for detecting ionizing radiations, n.e.s.: HSN code 9030 90. Components for testing and measuring equipment.  

• Electronic integrated circuits: HSN code 8542. Fundamental components of electronic devices.

28% GST Rate

The highest GST rate of 28% is applicable to certain electronic goods that are often considered luxury items or goods with higher consumption. Examples include:

• Air-conditioners: HSN code 8415. Considered comfort and luxury appliances.

• Electric accumulators, including separators: HSN code 8507. High-capacity batteries used in various applications.

• Monitors and projectors: HSN code 8528. Display devices for entertainment and professional use.

• Electrical ignition: HSN code 8511. Ignition systems for vehicles.

• Dish-washing machines: HSN code 8422. Labor-saving household appliances.

• Television sets larger than 32 inches: HSN code 8528. Larger screen sizes are considered more luxurious.

• Electric detonators: HSN code 3603. Used in mining and construction.

Impact of GST on the Electronics Industry

The implementation of GST has had a significant impact on the electronics industry. While the unified tax structure simplifies compliance, the varying tax rates across different electronic items have led to price adjustments. Some items that previously had lower tax rates now fall under higher GST slabs, leading to increased prices for consumers. Conversely, items that were taxed at higher rates under the previous regime might have seen a reduction in price.

The classification of goods under specific HSN codes is crucial for determining the correct GST rate. Businesses need to ensure accurate classification to avoid penalties and ensure compliance. The GST Council continuously reviews and updates the GST rates, which can further impact the pricing and taxation of electrical and electronic goods.

Conclusion

The GST rates for electrical parts and electronics in India are diverse, ranging from 5% to 28%, depending on the specific item and its HSN code. Renewable energy devices and related components attract lower rates, while common household appliances and electronic components are mostly taxed at 18%. Luxury electronic goods, such as large televisions and air conditioners, fall under the highest tax bracket of 28%. Knowing about these classifications and rates is essential for businesses and consumers to navigate the GST system effectively and ensure accurate pricing and tax compliance within the dynamic electrical and electronics sector.

Frequently Asked Questions (FAQs)

Q1. What is Chapter 85 of the HSN code, and what types of products does it cover?

Ans. Chapter 85 of the HSN code includes "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles." It covers a broad range of electrical and electronic items like electric motors, generators, household appliances, sound equipment, and television sets.

Q2. What are the GST rates applicable to electrical and electronic products under Chapter 85?

Ans. The GST rates for electrical and electronic products under Chapter 85 are categorized into 5%, 12%, 18%, and 28%. Essential components like electric vehicles, solar panels, and wind turbines fall under the 5% slab, while household appliances and industrial equipment generally attract 18% GST. Luxury items like air conditioners and large televisions are taxed at 28%.

Q3. Are solar power-based devices and renewable energy equipment taxed under GST?

Ans. Yes, solar power-based devices, biogas plants, wind turbines, and other renewable energy equipment fall under Chapter 84, 85, and 94 of the HSN code and are taxed at 5% or 12% GST, depending on their specific classification. This is to promote sustainable energy solutions

Q4. What GST rate is applicable to mobile phones and laptops in India?

Ans. Mobile phones are generally taxed at 18% GST under HSN code 8517, while laptops and computers fall under HSN code 8471 and also attract 18% GST.

Q5. Which electronic items fall under the 28% GST rate?

Ans. High-end electronic items like air-conditioners (HSN 8415), dish-washing machines (HSN 8422), large television sets (above 32 inches, HSN 8528), and electric accumulators (HSN 8507) fall under the 28% GST slab, classifying them as luxury or high-consumption products.