Lithium fluoride carbon primary batteries are benefiting from a 4% consumption tax exemption policy.

Notice on Imposition of Consumption Tax on Battery Coatings

Circular 16 of 2015 (Fiscal and Tax)

State Finance Departments (Bureaus), National Tax Administrations, Xinjiang Production and Construction Corps Financial Bureau:

To promote energy conservation and environmental protection, with the approval of the State Council, a consumption tax will be levied on batteries and coatings effective from February 1, 2015. The following matters are hereby notified:

Battery and paint will be included in the scope of consumption tax (specific tax item annotations are available in the attachment), levied at a rate of 4% during production, processing, and importation.

The following battery types are exempt from consumption tax: mercury-free primary batteries, nickel metal hydride batteries (also known as "hydrogen nickel batteries" or "nickel-hydrogen batteries"), lithium primary batteries, lithium-ion batteries, solar cells, fuel cells, and vanadium redox flow batteries.

Before December 31, 2015, a reduced consumption tax was imposed on lead-acid batteries; as of January 1, 2016, a consumption tax of 4% is levied on lead-acid batteries.

Taxes on paints with volatile organic compounds (VOC) content below 420 grams/liter (inclusive) during construction are exempt.

In addition to the aforementioned provisions, the administration of consumption tax on batteries and coatings shall be implemented in accordance with the "Interim Regulations on Consumption Tax of the People's Republic of China" and the "Detailed Implementation Measures for the Interim Regulations on Consumption Tax of the People's Republic of China," and other relevant regulations.

Attachment 1: Battery Tariff Classification Scope Annotation

Batteries are devices that convert chemical, light, and other forms of energy directly into electrical energy. They typically consist of an electrode, electrolyte, container, and terminal, often with an insulating layer as a fundamental functional unit. A battery pack is assembled from one or more of these fundamental functional units. The scope includes primary batteries, rechargeable batteries, fuel cells, solar cells, and other types of batteries.

Primary Battery

Primary batteries, also known as one-time batteries, are designed for single-use and cannot be recharged. Categorized by the active substances contained in their electrodes, primary batteries include zinc primary batteries, lithium primary batteries, and other types of primary batteries.

(Zinc Primary Batteries) Primary batteries with zinc as the anode, including zinc-manganese dioxide batteries, alkaline zinc-manganese dioxide batteries, zinc-air batteries (also known as "zinc-air batteries"), zinc-mercury oxide batteries (also known as "zinc-silver batteries"), and more.

(Lithium Primary Batteries) Lithium-based primary batteries, including lithium manganese dioxide batteries, lithium iron sulfide batteries, lithium oxygen batteries (also known as "lithium-air batteries"), and lithium fluoride carbon batteries, etc.

(3) Other primary batteries. Refers to primary batteries other than zinc and lithium primary batteries.

Primary batteries can be further categorized into mercury-free primary batteries and mercury-containing primary batteries. Primary batteries with mercury content below 0.0001% of the battery weight (for button cells, 0.0005%) are considered mercury-free primary batteries; all other primary batteries are classified as mercury-containing primary batteries.

Battery Storage

Lead-acid batteries, also known as secondary batteries, are designed for rechargeability and repeated use; they include acid batteries, alkaline or other non-acid batteries, redox flow batteries, and other types of batteries.

(A) Acidic Battery. A battery containing acidic electrolyte, including lead-acid batteries (also known as "lead batteries").

Lead-acid battery, referring to a battery that contains dilute sulfuric acid as the main electrolyte and lead as the negative electrode.

(II) Alkaline or other non-acidic batteries. This includes batteries with alkaline or other non-acidic electrolytes, such as lithium-ion batteries, metal hydride nickel batteries (also known as "hydro nickel batteries" or "nickel hydride batteries"), cadmium nickel batteries, iron nickel batteries, zinc silver oxide batteries (also known as "zinc silver batteries"), alkaline zinc dioxide batteries (also known as "rechargeable alkaline zinc dioxide batteries"), zinc air batteries (also known as "zinc air batteries"), and lithium air batteries (also known as "lithium air batteries").

(3) Redox Flow Battery. A storage device that converts electrical energy into chemical energy and vice versa through electrochemical reactions of ions with different valences in the electrolytes of the positive and negative electrodes, currently mainly including vanadium redox flow batteries. Vanadium redox flow batteries are storage devices that convert electrical energy into chemical energy and vice versa through electrochemical reactions of vanadium ions with different valences in the electrolytes of the positive and negative electrodes.

(4) Other Batteries. Batteries not covered under (1), (2), or (3).

Fuel Cell

Fuel cells are electrochemical generators that convert the chemical energy of continuously supplied reactants and oxidants directly into electrical energy through an electrochemical process.

Solar Cells

Solar cells are devices that convert sunlight into electricity, encompassing crystalline silicon solar cells, thin-film solar cells, and compound semiconductor solar cells, but not including batteries used for energy storage in solar power generation.

V. Other Batteries

Batteries other than primary cells, secondary batteries, fuel cells, and solar cells.

Appendix 2: Remarks on the Scope of Taxable Items for Paints

Paint is a general term for a variety of liquids or solids applied to the surface of objects to form a solid film with protective, decorative, or special properties.

The paint is composed of main film-forming substances, secondary film-forming substances, etc. Based on the main film-forming substances, paints can be categorized into oil-based, natural resin-based, phenolic resin-based, asphalt-based, alkyd resin-based, amino resin-based, nitro-based, ethylene filter resin-based, olefin resin-based, epoxy resin-based, polyurethane resin-based, element organics, rubber, cellulose, and other film-forming substances.