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December 25, 2024

Viraaj Vashishth

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Geyser, Water Heater HSN Code and GST Rate - 8516

A geyser or water heater is great especially since it is found in every home, businesses, hotels, and even offices, having hot water available for day-to-day tasks. For businesses involved in manufacturing, distribution, and retail, water heating appliances are required for the proper use of HSN (Harmonized System of Nomenclature) Code. Speaking from the perspective of Goods and services tax (GST), knowing what HSN Code covers what appliance and what GST is applicable makes the compliance and tax calculation easier. This blog will cover the topics of geyser HSN code, water heater HSN code along with their respective GST rates which will help consumers develop an understanding of the taxation norms imposed on geyser or water heating related appliances.

What HSN Code is?

The Harmonized System of Nomenclature or HSN Code is a detailed universal system that facilitates international trade of goods. Also created by The World Customs Organization (WCO) with a purpose of avoiding needless furor in the processes of customs and international trade.

You can also read: Place of Supply: The Complexities of Imports and Exports

In the case of GST, HSN Codes do two things, they help differentiate various goods, then set the applicable taxes on each of them. Мandatory for water heaters and geysers sellers, adherence to HSN code is critical. Misclassification can result in taxpayers having to pay higher taxes or being opposed to using the government regulated framework.

HSN Code 8516: Breakage and Structure

According to the GST system, geysers and water heaters HSN code belongs to Chapter 85 which speaks about Electrical machinery and equipment. More particularly the 8516 HSN code is destined for electric instantaneous or storage water heaters and immersion heaters.

GST Rate on Geysers and Water Heaters

According to GST provisions, geysers and water heaters' specific type and features determine their gst rates. For now, there is a unified gst policy of 18% on geysers as well as water heaters under the HSN code 8516. It is crucial to note all kinds of water heaters may fall under different categories attracting varying gst rates depending on which type of energy they consume.

HSN Code	Description	Rate (%)	Effective Date	Rate Revision
8516	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electro-Thermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers	18	27/07/2018 27/07/2018	18% omitted from 28%
85161000	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers	18	27/07/2018 27/07/2018	18% omitted from 28%
85162100	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85162900	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85163100	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85163200	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85163300	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85164000	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85165000	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85166000	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85167100	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85167200	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
851679	Other	18	27/07/2018 27/07/2018	18% omitted from 28%
85167910	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85167920	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85167990	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85168000	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%
85169000	Electric Instantaneous Or Storage Water Heaters And Immersion Heaters; Electric Space Heating Apparatus And Soil Heating Apparatus; Electrothermic Hair-Dressing Apparatus (For Example, Hair Dryers, Hair Curlers, Curling Tong Heaters) And Hand Dryers; Elec	18	27/07/2018 27/07/2018	18% omitted from 28%

Electric Geyser HSN Code and GST Rate

Generally referred to as a geyser, water heaters or electric geysers which include both instant and storage type, are subjected to an 18% tax rate. The concerned HSN code for them is 8516. The tax applies to even domestic use, commercial use and even to industrial water heaters.

Solar Water Heater

Although solar water heaters are categorized under the same broad heading 8516 with electric heaters there is a considerable difference in the GST rate. Solar water heaters are charged a 5% GST. It is evident from this that there is a reductionital rate. This is a strategy by the government to stimulate or motivate the use of renewable energy products.

Consumer Effect Caused by the Implementation of GST

Taxes such as GST affect the price at which a commodity is sold. For Example, the price of geysers and water heaters increases by GST to fill price water heaters tickets at 10000 Rupees plus 1800 Rupees or 18% of that geyser cost. Thus the entire geyser would cost 11800 Rupees.

However it may be noted that when a consumer is buying solar water heaters, they will pay a lower 5 percent GST on the geyser. This will in turn mean greater savings on a broad spectrum of new solar powered products in future. You can also read about: PURA Scheme: Objectives and Features.

GST Exemptions or Concessions (If Any)

While tankless electric geysers and tanks electric water heaters are taxed at 18 percent mostly, other products under the gst have some ceiling rates. One such case is tankless electric water geysers systems (check how tankless water heater systems work) where the applicable gst would be 5% if atleast one of the following criteria is satisfied per conditions of supply and use of the product in furtherance of business. The conditions are as follows:

1. The primary purpose of the product is a solar water heater.

2. The installation is done using clean technology due to which geogenic emissions are stabilized.

This incentive is targeted towards the adoption of green technologies and policies as formed by government.

Conclusion

To end, it is crucial to grasp the geysers HSN code (8516) as well as the GST rates applicable to geysers, for individuals as well as companies. Geysers of electric type generally have 18% and geysers of solar type have 5% GST which is low in rate in order to encourage solar energy use. In the case of businesses, proper GST returns and filing against the relevant HSN Code (8516) is critical in order to prevent fines and leveraging useful advantages such as Input Tax Credits. It turns out that through keeping oneself updated with changes in GST rates and HSN codes, businesses will avoid market failures.

FAQs

1. Which is the HSN code for geysers?

The HSN code for geysers is 8516 which includes appliances like electric, water immersion, and direct water heaters.

2. What is the applicable GST rate for water heaters of HSN code 8516?

The GST rate applicable for water heaters of HSN code 8516 are 18% most of the time and which is the case for almost all electric and immersion water heaters.

3. In the case of a water heater, HSN code 8516 is applicable, which items are included in that category?

The HSN Code 8516 includes electric, direct, and also storage water heaters, along with immersion heaters and equivalent items.

4. Is there any distinction in GST rate between electric water geysers and solar water heaters?

Yes, the GST on electric geysers is charged at the rate of 18% while there might be a 5% GST charge on solar water heaters.

5. Under HSN code 8516, are businesses able to get Input Tax Credit(ITC) on geysers?

Yes, for geysers and water heaters sales under HSN code 8516, businesses are eligible for getting ITC on the GST paid.

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