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Published on:

September 16, 2024

Viraaj Vashishth

GST on Vegetables and Fruits with HSN Code

The new Goods and Services Tax regime was implemented in India with effect from 01st July 2017 to rationalize and consolidate the indirect tax regime. This led to substantial changes in taxation practices with a few more kinds of services specifically for agricultural products that are vegetables and fruits. Therefore businesses and consumers need to understand the vegetable HSN code and GST rates of fruits.

GST Classification for Vegetables and Fruits

HSN codes, also known as the Harmonized System of Nomenclature codes, are a standardized coding system for a specific subdivision of traded items. To prevent fragmentation and discrimination among taxpayers on a single supply which can be a combination of several goods, HSN codes are equally beneficial in the appropriate categorization of items. The HSN code classification system consists of levels whereby every level is typically indicated by a digit.

HSN Code Breakup

The HSN Code as provided by various tax laws in the world is at least 6 digits long.

1. The first two digits: Represent the chapter of the product.

2. The next two digits: Represent the heading under the chapter.

3. The last two digits: Represent the subheading.

For instance, HSN codes for “potatoes, fresh or chilled”, the code 0701– with 07 standing for the chapter (vegetables) 01 heading from potatoes. More digits would further assign the particular variety of potatoes.

HSN Codes for Vegetables

Below is a table showing common HSN codes for vegetables and their corresponding GST rates:

HSN Code	Description	Rate (%)	Effective Date	Rate Revision
710	Vegetables (Uncooked Or Cooked By Steaming Or Boiling In Water), Frozen	Nil	01/01/2019	omitted from 5%
7101000	Frozen Potatoes	5	01/07/2017	5%
7102100	Frozen Leguminous Vegetables, Shelled Or Unshelled: Peas (Pisum Sativum)	5	01/07/2017	5%
7102200	Shelled Or Unshelled Beans (Vigna Spp., Phaseolus Spp.)	5	01/07/2017	5%
7102900	Other	5	01/07/2017	5%
7103000	Frozen Spinach, New Zealand Spinach And Orache Spinach (Garden Spinach)	5	01/07/2017	5%
7104000	Frozen Sweet Corn	5	01/07/2017	5%
7108010	Frozen Other Vegetables Tarragon	5	01/07/2017	5%
7108090	Other	5	01/07/2017	5%
7109000	Frozen Mixtures Of Vegetables	5	01/07/2017	5%

HSN Codes for Fruits

Similarly, here is a table for common fruits:

HSN Code	Description	Rate (%)	Effective Date
2001	Vegetables, Fruit, Nuts And Other Edible Parts Of Plants, Prepared Or Preserved By Vinegar Or Acetic Acid	12%	01/07/2017
20011000	Cucumbers And Gherkins	12%	01/07/2017
20019000	Other	12%	01/07/2017
2002	Tomatoes Prepared Or Preserved Otherwise Than By Vinegar Or Acetic Acid	12%	01/07/2017
20021000	Tomatoes, Whole Or In Pieces	12%	01/07/2017
20039090	Other	12%	01/07/2017
2007	Jams, Fruit Jellies, Marmalades, Fruit Or Nut Puree And Fruit Or Nut Pastes, Obtained By Cooking, Whether Or Not Containing Added Sugar Or Other Sweetening Matter	12%	01/07/2017
20071000	Homogenized Preparations	12%	01/07/2017
20079100	Citrus Fruit	12%	01/07/2017
200799	Other	12%	01/07/2017
20079910	Mango	12%	01/07/2017
20079920	Guava	12%	01/07/2017
20079930	Pine Apple	12%	01/07/2017
20079940	Apple	12%	01/07/2017
20079990	Other	12%	01/07/2017
2008	Fruit, Nuts And Other Edible Parts Of Plants, Otherwise Prepared Or Preserved, Whether Or Not Containing Added Sugar Or Other Sweetening Matter Or Spirit, Not Elsewhere Specified Or Included - Nuts, Ground-Nuts And Other Seeds, Whether Or Not Mixed Together	12%	01/07/2017
200819	Other, Including Mixtures	12%	01/07/2017
200830	Citrus Fruit	12%	01/07/2017
20083010	Orange	12%	01/07/2017
20083090	Other	12%	01/07/2017
20084000	Pears	12%	01/07/2017
20085000	Apricots	12%	01/07/2017
20086000	Cherries	12%	01/07/2017
20087000	Peaches, Including Nectarines	12%	01/07/2017
20088000	Strawberries	12%	01/07/2017
200893	Cranberries	12%	01/07/2017
200897	Mixtures	12%	01/07/2017
200899	Other	12%	01/07/2017
2009	Orange Juice	12%	01/07/2017
20091100	Orange Juice : Frozen	12%	01/07/2017
20091200	Fruit Juices	12%	01/07/2017
20091900	Other	12%	01/07/2017
20092900	Other	12%	01/07/2017
20093100	Juice Of Any Other Single Citrus Fruit : Of A Brix Value Not Exceeding 20	12%	01/07/2017
20093900	Juice Of Any Other Single Citrus Fruit : Other	12%	01/07/2017
20094100	Pineapple Juice : Of A Brix Value Not Exceeding 20	12%	01/07/2017
20094900	Other	12%	01/07/2017
20095000	Tomato Juice	12%	01/07/2017
20096100	Grape Juice (Including Grape Must) : Of A Brix Value Not Exceeding 30	12%	01/07/2017
20096900	Other	12%	01/07/2017
20097100	Apple Juice : Of A Brix Value Not Exceeding 20	12%	01/07/2017
20097900	Apple Juice : Other	12%	01/07/2017
200980	Juice Of Any Other Single Fruit Or Vegetable	12%	01/07/2017
200981	Cranberry	12%	01/07/2017
20098100	Fruit Juices (Including Grape Must) And Vegetable Juices, Unfermented And Not Containing Added Spirit, Whether Or Not Containing Added Sugar Or Other Sweetening Matter-Juice Of Any Other Single Fruit Or Vegetable--Cranberry (Vaccinium Macrocarpon,Vaccinium	12%	01/07/2017
200989	Other	12%	01/07/2017
20098910	Mango Juice	12%	01/07/2017
20098990	Other	12%	01/07/2017
200990	Mixtures Of Juices	12%	01/07/2017
20099000	Fruit Juices (Including Grape Must) And Vegetable Juices, Unfermented And Not Containing Added Spirit, Whether Or Not Containing Added Sugar Or Other Sweetening Matter Mixtures Of Juices	12%	01/07/2017
2031	Fresh Or Chilled	0%	01/07/2017
2032	Frozen	0%	01/07/2017
2042	Other Meat Of Sheep,Fresh Or Chilled	0%	01/07/2017
2044	Other Meat Of Sheep, Frozen	0%	01/07/2017
2062	Of Bovine Animals, Frozen	0%	01/07/2017
2064	Of Swine,Frozen	0%	01/07/2017
2071	Of Fowls Of The Species Gallus Domesticus	0%	01/07/2017
2072	Of Turkeys	0%	01/07/2017
2073	Of Ducks, Geese Or Guinea Fowls	0%	01/07/2017
2075	Of Geese	0%	01/07/2017

Vegetables GST Rate and Fruits

Zero Rate GST

Certain varieties of vegetables and fruits have been exempted from GST or do not attract a GST for their sale and trading which is known as Zero Rate GST. This type of no taxation on basic food items is rather to be expected. For instance, green or red vegetables or fruits unsold in their natural environment are not subject to GST changes.

5% GST Rate

The 5% GST rate is the predominant VAT type for most types of vegetables and fruits. This includes green, leafy and other vegetables such as potatoes, onions, apples and several more types of fresh produce foods. The lower GST rate has been aimed at reducing the basic food commodity outlays while the average consumer purchases.

12% GST Rate

Processed or value addition of certain vegetable and fruit products attracts a 12% GST rate. Also, grocery items that freeze-dried or dehydrated vegetables GST rate in foods or fried fruits are at a higher rate.

18% GST Rate

However, hitherto with such no fresh vegetables and no fresh fruits, If at all grapefruit fruits, the bearer would attract an 18% GST. Still, some of these products considered imported or unique sterile or processed specialized fruits of high or luxury range seem to bear this mesh.

Effects of GST on Agriculture

Impact on Farmers

The introduction of GST came along with some adjustments in pricing and sales revenue for the case of farmers. GST has ensured some degree of compliance and transparency for the importation of fruits and vegetable HSN code but also increased the compliance cost. Farmers are under pressure from these laws to register for GST, which is remarkable as adherence facilitates the accurate reporting of the requisite taxes.

Impact on Consumers

On the other hand, for consumers, the introduction of the GST has also affected the pricing of vegetables as well as GST on fruits. As it is, the 5% talking of the GST level is quite low and thus the prices of most of the key basket provisions will remain within reach of the common people. Nonetheless, some foodstuffs are processed hence attracting a higher GST rate may increase the price of goods to consumers.

Consideration of Trade and Export

The GST regime also has an impact on the exportation of vegetables and fruits. There is no doubt that exporters should also take GST into their calculations since they seek domestic tax refunds when exporting. Exportation involves a lot of compliance with the necessary international trade regulations and domestic GST rules, and this has to be adhered to for smooth operations in the exportation process.

Case Studies and Examples

Example 1: GST on Potatoes

In the case of a seller selling potatoes (HSN Code 0701) to his customers, a tax rate of 5% GST is applicable. That is when selling himself, he has to include 5 percent VAT into the price that the buyer has to return to him and later pass it over to the state.

Example 2: GST on Apples

Also, for apples ( HSN code 0808) GST of 5% is applicable. This requires raising the cost of the apple by a certain percentage on accounting for 5% GST and preparing the relevant returns.

Comparative Analysis

Consumption taxation of different vegetable HSN codes and fruits commodity categories with GST rates highlights the dedication of governments to making basic foodstuffs affordable. This is however not the same for the rates charged on processed commodities, which brings about a difference in pricing pattern and the choice of the consumers.

Conclusion

In conclusion, the GST components applicable to vegetables and GST on fruits based on specific HSN codes are critical in the agricultural perspective. Most of the fresh fruits and vegetables are expected to attract a GST of 5% making it manageable to all consumer base. However, the GST regime has to be adhered to by sellers and farmers for efficient operation or risk penalties. There may be other implications that will arise concerning potential changes in GST rates or HSN classifications. All stakeholders of agriculture, in particular resources, will need to be very attentive to these issues to incorporate the changes.

FAQs

1. Which HSN code is applicable for vegetables?

For vegetable HSN code, it is more often within the range of 0701 to 0714, depending on the specific vegetable in question. An illustration would be HSN Code 0701 which is the 1 for potatoes.

2. How is GST on vegetables calculated?

The GST rate on vegetable HSN code is usually fixed at 5% which is standard; most vegetables however may not be taxed or may be scheduled at different rates depending on how much they have been processed among other things.

3. Fruits are not subject to GST. Is this true?

That's also correct. Fruits are also taxed under GST at about 5% most of the time. This does include fruits like mangoes, apples, and oranges.

4. What is the GST on vegetables and how much is it applicable?

The tax rate required for sales of most of the fresh vegetables GST rate will be 5% GST. However, the same products when bought in a processed package may attract other rates.

5. Where can I check the specific HSN code of various fruits?

To know where one can check for the nomenclature HSN Code of fruits that garnered enlightenment on the GST classification list. For example, mangoes are under HSN Code 0804.

6. Are there any exemptions for GST on vegetables?

Yes, certain vegetables which are basic commodities may not attract GST or are taxed at zero percent. This is especially true for vegetables which are sold in the raw state.

7. What is the applicable GST on fruits that are processed?

Higher rates of GST as in the case of stores selling canned or dried fruits would be applicable, around 12% or 18% according to their processing and packaging methods.

8. Should HSN code for vegetables be mentioned while filing for GST Returns?

Yes, vegetables have HSN codes that must be reported in the returns to ensure that classification is well done.

9. Is it possible that the GST on vegetables can be changed?

Yes, vegetables GST rates are subject to revisions depending on government policies. The most recent alerts regarding GST must be known.

10. What impact can GST on fruits have on the fruit cost for the customers?

Taxation on fruits in this case has been rated at 5% because it is exempted but the selling price at retail is also affected. Fruttare mandates its outlets on higher rates for processed fruits which then makes its consumers end up spending a lot more money.

Updated on:

September 16, 2024