GST Rates and HSN Code for Ferro-Cerium & Pyrophoric Alloys

Ferro-cerium and pyrophoric alloys are special materials. This generates sparks when scraped, rubbed or struck. These alloys are widely used in lighters, fire starters, igniters, and other combustible tools. They are considered combustible products so they fall under a special classification in the HSN. The HSN code and GST Rate applicability are important to understand for manufacturers, importers, exporters & traders dealing with these goods.

HSN Code for Ferro-Cerium & Pyrophoric Alloys

Under the Indian tariff system, ferro-cerium and pyrophoric alloys are placed under Chapter 36. This chapter covers explosives, pyrotechnic products, matches, pyrophoric alloys, and certain combustible preparations. Under HSN 3606, ferro-cerium and other pyrophoric alloys in all forms come under this heading. Within this heading, different sub-headings are used for specific products:

HSN Code	Description
36061000	Liquid or liquefied-gas fuels in containers for filling or refilling lighters
36069010	Other: Combustible preparations
36069091	Ferro-cerium, in all forms
36069092	Pyrophoric alloys, in all forms
36069093	DNPT (Dinitroso-penta-methylene tetramine)
36069099	Other articles not classified elsewhere under 3606

This classification can help businesses to identify the correct category for customs. Also GST & trade compliance.

GST Rate on Ferro-Cerium and Pyrophoric Alloys

Ferro-cerium and pyrophoric alloys under HSN 3606 are taxed at 18% GST. Earlier these goods were placed under the 28% slab. But the GST Council reduced the rate to 18%. This is effective from 15 Nov 2017. This 18% tax applies uniformly across all subheadings under 3606. Unless it is exempted by special notification.

GST Components

Based on the type of transaction the GST is split into different components.

1. Intra-State Supply (within one state):

a. CGST is charged at 9%

b. SGST is charged at 9%

c. The total is 18%

‍2. Inter-State Supply (between two states/ UTs):

a. IGST is charged at 18%

This system ensures that both the Centre and the States receive their share of tax.

Practical Example

If a trader sells ferro-cerium worth ₹1,00,000 within Delhi:

CGST = ₹9,000
SGST = ₹9,000
Total GST = ₹18,000

If the same supply is made from Delhi to Mumbai:

IGST = ₹18,000
Total GST = ₹18,000

Global Trade Perspective

The classification of ferro-cerium and pyrophoric alloys under HSN 3606 is the same as the World Customs Organisation (WCO) system. Businesses can use the same code for import and export. This ensures smoother customs clearance. It also reduces the risk of disputes. For international shipments, both customs duties and GST/IGST apply. It depends on the country of origin & trade agreements.

Impact of GST on Businesses

The reduction from 28% to 18% made these goods more affordable. Industries such as lighter manufacturing, defence suppliers, and camping gear companies got benefit from reduced costs. Input Tax Credit (ITC) under GST helps businesses offset taxes paid on inputs. It ensures fair pricing.

Compliance and Documentation

Businesses must ensure correct classification because it avoids penalties. Some key compliance areas include:

Invoices: In invoices, the right HSN code and GST rate must be mentioned.

E-Way Bills: E-Way bills are required for interstate transport above the threshold value.

GST Returns: HSN summary must match product classification.

Export Documents: Correct HSN ensures smooth refund processing under zero-rated supplies.

Exemptions or Special Cases

As of now, there are no specific exceptions for ferro-cerium and pyrophoric alloys under GST. All forms are taxed at the standard 18% rate. Though, any future GST Council decisions could revise this classification.

Future Trends in GST for Combustible Products

The GST Council regularly reviews tax rates based on industry feedback. For combustible goods like ferro-cerium:

Rates could be revised further if the industry demands lower taxation for manufacturing growth.

Safety regulations might influence classification changes in the future.

Businesses must keep track of GST notifications to stay updated.

Also Read: GST Rates and HSN Code 8711 for Motorcycles.

Conclusion

Ferro-Cerium and Pyrophoric Alloys are categorised under HSN 3606. They are taxed at 18% GST. It is applied through CGST + SGST for intra-state and IGST for inter-state or imports. It is important to use the correct HSN for compliance, invoicing & tax credits.

For businesses, the rate reduction from 28% to 18% has been a relief. It has lowered costs. It made products more competitive. Domestic sales to global trade, proper classification of GST ensures smooth operations and avoids compliance issues.

FAQs

1. What is the HSN Code for ferro-cerium and pyrophoric alloys?

Ferro-cerium and pyrophoric alloys are classified under Chapter 36 of the HSN system. This chapter deals with explosives & combustible materials. Ferro-cerium in all forms is covered under HSN 36069091. Pyrophoric alloys in all forms are covered under HSN 36069092. The right HSN code in invoices and GST returns ensures proper compliance. It avoids disputes during audits.

2. What is the GST rate applicable to ferro-cerium and pyrophoric alloys?

Both ferro-cerium and pyrophoric alloys are taxed at the 18% GST Rate. This rate applies uniformly whether the goods are supplied domestically or imported. Earlier, these items were placed under the 28% slab but in Nov 2017, the GST Council reduced it to 18%. It was done to make the products more affordable and support industries that use them.

3. How is GST applied on intra-state & inter-state sales of these alloys?

When goods are sold within the same state then GST is divided into two parts. CGST 9% and SGST 9%. The total is 18%. For the sale made between two states, IGST 18% is applied. The structure is different but the final tax payable remains the same in both cases.

4. How does GST affect imports of ferro-cerium and pyrophoric alloys?

On imports, businesses need to pay both customs duty & IGST at 18%. The IGST paid can be claimed as Input Tax Credit (ITC). This reduces the overall tax burden. This makes GST a credit-friendly system for importers. Because they can offset taxes paid at the border against their output tax liability.