How is the Value-added Tax treatment towards cars and car parts manufacturers in China?

The general Value-added tax (VAT) rate of 17 percent applies to both cars and car parts. However, it is important to notice the difference in VAT treatment to small-scale tax payers and general tax payers, which are distinguished based on their annual taxable sales amount. While small-scale tax payers can pay the lower amount of 3%, general taxpayers need to pay the general VAT rate of 17%. However, manufacturers who are qualified as general taxpayers can offset the VAT through the use of special invoices or fapiao while small-scale taxpayers cannot.