GST on Air Conditioners: Tax Rates

HSN Code, and Billing Rules

With the implementation of the Goods and Services Tax (GST), India brought uniformity to the indirect tax structure. However, understanding GST rates for specific products can still be confusing. One such product is the air conditioner (AC)—a common household and commercial appliance. In this blog, we will explain the GST rate on air conditioners, their HSN code, and billing compliance rules to help both buyers and sellers stay updated.

🧾 What is GST on Air Conditioners?

As per GST law, air conditioners fall under the category of luxury or high-end electrical goods, and are therefore taxed at a higher rate.

• GST Rate on Air Conditioners (Split or Window): 28%
  This includes all types of ACs—split, window, tower, inverter-based, and central air conditioning systems.

• IGST (Interstate Supply): 28%

• CGST + SGST (Intrastate Supply): 14% + 14%

🔔 There is no GST rate concession on energy-efficient models or low-capacity ACs. All are taxed uniformly at 28%.

📊 HSN Code for Air Conditioners

HSN (Harmonized System of Nomenclature) is a global classification system used to identify goods under GST.

• HSN Code for Air Conditioners: 8415

Description of HSN Code 8415:

"Air conditioning machines comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated."

Sub-classifications under HSN 8415:

💡 While billing, using the correct HSN code is mandatory for businesses with turnover above ₹5 crore or if issuing e-invoices.

🧾 Input Tax Credit (ITC) on AC Purchases

Businesses can claim ITC on air conditioners if they are used for business purposes—such as ACs installed in office buildings, hotels, factories, or showrooms.

However, ITC will not be allowed:

• If ACs are used for personal use

• If capitalized in books without charging depreciation on GST portion

Always consult with a tax advisor before claiming ITC on AC purchases.

💻 Billing Rules and Compliance

When selling or purchasing air conditioners, the GST invoice must follow standard billing guidelines:

1. Invoice must include:

   • Seller and buyer details (GSTIN)

   • Invoice number and date

   • Description of goods (with HSN code)

   • Unit quantity, taxable value

   • GST rate (28%) and amount (CGST/SGST or IGST)

   • Total invoice value

2. E-Invoicing (Mandatory if turnover > ₹5 Cr):

   • Must generate IRN (Invoice Reference Number)

   • QR Code and acknowledgement number must be on the invoice

3. Warranty, AMC, and Installation:

   • These are treated as services and attract GST @18% separately

   • Must be billed on separate invoices if applicable

📦 GST on Accessories and Spare Parts

• Remote controls, compressors, filters, etc. may attract 18% or 28% GST based on classification.

• It’s important to check the HSN code and GST rate for each component separately.

Frequently Asked Questions