Two months on from April 1, 2026, the biggest change to China's export VAT rebate regime in over a decade has settled from "looming deadline" into operating reality. Under MOF & STA Announcement No. 2 of 2026 — issued January 8–9 — China cancelled the export VAT rebate entirely for 249 product categories and cut the battery rebate from 9% to 6%, all triggered by the export date on the customs declaration. With the dust settled, here is where exporters actually stand and what still needs attention.

What Was Cancelled

The 249 categories that lost their rebate outright span more than just solar. They include solar PV cells, modules, wafers and inverters; refined oil products; a range of chemicals; ceramics, glass, stone and building materials; and e-cigarettes and related nicotine-inhalation products. Separately, 22 battery categories moved to the reduced 6% transitional rate rather than losing the rebate immediately.

Importantly, the cancellation attaches to specific HS codes listed in the announcement annexes — not to whole industries by reputation. Some adjacent items were spared: certain PV production equipment and structural components, for example, were not on the cancellation list. The lesson that held through the transition: verify the exact HS code against the official list rather than relying on "the whole solar chain is gone" shorthand.

The Pre-Deadline Rush — and the Hangover

As widely predicted, Q1 2026 saw a pull-forward surge as manufacturers and buyers raced to clear customs before April 1 and capture the final rebate. That frontloading lifted some module prices in the short term and strained freight capacity. The flip side is a softer order book in the months immediately after the cutoff for affected categories, as demand that would have arrived later was consumed early. Exporters in these sectors should read current order softness partly as a timing artifact rather than a pure demand signal.

Where Margins Land Now

For a cancelled category, the non-refundable input VAT that used to come back now stays as a cost. Analysts estimated the change would raise international module costs on the order of 10–15% through 2026 once the rebate cushion disappeared. For exporters, the practical question is who absorbs that gap — and the answer is being settled order by order in price negotiations. Where supply contracts predated the announcement, some buyers and suppliers have looked to "change in law" clauses to reallocate the increased cost, with the outcome depending on the specific contract wording and notice provisions.

What Still Needs Attention

  • Re-confirm your HS codes. If you export anything in chemicals, non-metallic minerals, building materials, solar, or batteries, check each product line against the official cancellation and battery annexes before quoting 2026 orders.
  • Mind the declaration date, not the contract date. Eligibility turned — and for batteries still turns — on the export date stamped on the customs declaration. Timing a shipment a few days either side of a boundary can mean the difference between a rebate and none.
  • Reprice rather than assume. For affected goods, the old landed-cost math no longer holds. Rebuild the calculation with the current refund rate (often zero) baked in.
  • Watch for further adjustments. This round targeted overcapacity-prone sectors. The rebate catalogue is a standing industrial-policy lever, so exporters in price-competitive, oversupplied categories should treat their current rate as reviewable rather than permanent.

How Zhongshen Can Help

We verify HS-code rebate eligibility against the current official lists, model the margin impact of a changed or cancelled rate, and time declarations to protect rebate entitlement where a boundary is in play. If you export in any of the affected sectors, contact our rebate desk for a product-by-product review of where you stand after April 1.