Maize (Corn) HSN Code and GST Rate - 1005: A Detailed Guide

Being one of the most-celebrated cereal crops worldwide, maize is an important crop in Indian agriculture. It is a multipurpose crop as it can find use in foods, animal feeds, and industrial goods. Following the introduction of the goods and services tax (GST) in India, it became necessary to clearly categorize maize under the goods and services tax harmonized system of nomenclature (HSN) codes in order to avoid any tax-related issues. This article explores the maize GST new developments in the country, the maize GST legal requirements, as well as other aspects that define the maize HSN code.

It is one of the staple crops of India, which is grown in abundance in most parts of the country. It is among the top maize-producing crops worldwide. Under the name corn, corn flour, corn kernels, and animal feeds are widely in use. Attaching a good maize HSN code and implementing a good GST policy to it provides a robust framework for maize taxation that simplifies its trade as well as the respective taxation policies.

This article defines the maize HSN code and GST rate comprehensively and answers crucial questions such as Is maize subject to GST? and provides a detailed explanation of the classification under the 1005 HSN code.

Maize or Corn – Its Importance

Maize or corn is also known as the staple food crop as well as animal feed. There are further subdivisions of Mays which are as follows:

1. Yellow maize - Dominantly used for human consumption and animal feed.

2. White maize - Primarily used for food.

3. Sweet corn - A type of corn which is consumed as a vegetable.

4. Popcorn - Grown specifically for popping.

Maize cannot be disregarded as it is a decent source of food and feed is also crucial in the manufacturing of corn-based products such as corn syrup, oil and starch. Because the importance of maize is vast, it can be assigned different HSN codes based on its use.

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Maize and Its Classification Under GST

Maize is goods all across the globe. It is classified using codes as HSN code (Harmonized System Nomenclature) which is based on features and use. For instance under GST, maize comes under HSN Code 1005 which pertains to other cereals which contain corn and the various other types of Maize. This HSN code is further divided into various sub codes in terms of taxation precautions.

HSN Code 1005 Classification:

1. 1005.10: Maize (corn) seeds

2. 1005.90: Other maize (corn), not specified in the above categories.

This classification is important for traders and farmers as maize seeds and maize for other uses bear different applicable GST rates.

GST Rate for Maize (Corn)

After the introduction of GST, it became clear how taxation of agricultural goods is to be carried out. The GST rate for maize(corn) depends on the use and classification of the maize (corn).The most important issue for traders and businesses is: Is maize (corn) taxable under GST? Yes, Maize (corn) is taxable. The tax rate, however – depends on the type of maize product being traded.

HSN Code	Description	Rate (%)	Effective Date	Rate Revision
1005	Maize (Corn)	5	01/07/2017	5%
1005	Maize (Corn)	0	01/07/2017	0%
10051000	Maize (Corn) Seed	5	01/07/2017	5%
100590	Other	5	01/07/2017	5%
10059000	Maize (Corn) Other	5	01/07/2017	5%
10059011	Yellow	5	01/07/2017	5%
10059019	Other	5	01/07/2017	5%
10059020	Flint Corn (Zea Mays Var. Indurata)	5	01/07/2017	5%
10059030	Popcorn (Zea Mays Ver, Everta)	5	01/07/2017	5%
10059090	Other	5	01/07/2017	5%

Note: The GST rates may vary from state to state or in cases of special conditions, hence it is prudent to get the rate verified with the local authorities or speak to an expert.

Maize Trading and Its Impact on GST

Indian exporters and maize traders need to have appropriate HSN code classification for their goods. This classification affects the rate of GST which subsequently impacts the pricing, the tax returns filing, and even cost structure of the goods. The maize traders need to correctly quote the HSN code 1005 in the invoices for efficient GST filing as well as avoid penalties. If the trader is engaged in maize (corn) export, then he has to understand that 5 % GST on maize (corn) will be a critical factor in pricing and margin calculations. However, there might be some refund or reduced rates available for exports which can be beneficial for the cost. It is also critical from the compliance perspective for farmers and small traders to comprehend how GST on maize works.

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Case Studies and Practical Examples

Example 1: GST Application on Maize Supplied to a Food Processing Industry

Let’s assume a trader sells yellow maize to a company that processes maize into corn flour. The maize will be classified under HSN Code 1005.90 and 5 percent GST will apply. It will be the responsibility of the company to ensure proper GST charge is applied on the sale.

Example 2: GST on Maize Purchased for Animal Feed

A farm that rears livestock buys maize grain as animal feed. This particular product is classified under HSN Code 1005.90 and attracts 5% GST. The farm has to factor this in when computing the production cost.

Example 3: Exporting of Maize

An exporter of maize sends corn to another country. Export of agricultural products is however generally in most cases exempted from GST thus the 5 percent GST that would have applied on exports of maize wouldn’t have applied.

Conclusion

This text describes how maize is traded and processed. It includes the standard rate of GST and HSN code. For starters, let’s focus on the important aspect of maize which is to assign the correct classification under HSN Code 1005. Doing this step will automatically define the correct GST rate to apply, making it easy for businesses to operate without facing the risk of being fined for making errors. In regard to non seed maize, the 5% GST rate was applicable on other products as well and this made it easier for maize traders because there were minimal bureaucratic processes to go through and even the GST exemption on maize seeds propelled the agricultural sector. All in all, an accurate classification of HSN brings both operational and strategic advantages in pricing and taxation in the maize value chain.

FAQs

1. What is the maize HSN code?

The maize HSN code is 1005 in relation to corn under the GST system.

2. Is GST applicable on maize?

Actually yes, maize also has a GST attached to it. The percentage is definitional and is determined based upon its use be it as human food or animal fodder.

3. What is the GST rate for maize under HSN code 1005?

As stated above, there are different rates required for different uses of maize. However, for those items such as corn intended for food or feed, the tax is around 5 percent according to HSN code 1005.