Cotton is a natural fiber that is widely used in textile manufacturing. It is classified based on its preparation, which can include any of the following: carding, combing, or neither. In this article, we will focus on cotton that is not carded or combed and explore the GST rates and HSN codes associated with it.
Cotton is a soft, fluffy fiber that grows in a protective case, or boll, around the seeds of the cotton plant. The fiber is most often spun into yarn or thread and used to make textile products. Cotton is commonly used in clothing, bedding, and towels, as well as in industrial products like filters, tents, and explosives.
Cotton can be classified based on how it is prepared. The three most common methods of preparation are carding, combing, and neither. Carding is the process of separating and straightening the fibers of cotton, while combing is a more thorough process that removes impurities and shorter fibers. Cotton that has not been carded or combed is sometimes referred to as "raw" cotton.
The Goods and Services Tax (GST) is an indirect tax that is levied on the supply of goods and services in India. The GST rates for cotton, not carded or combed, are as follows:
1. 5% GST rate for cotton waste including yarn waste and garnetted stock
2. 5% GST rate for cotton, not carded or combed
The GST rate for cotton, not carded or combed, is 5%. This rate is applicable to all types of raw cotton that have not undergone either carding or combing. The rate also applies to cotton linters, which are the short fibers that remain on cotton seeds after the lint has been removed.
It is important to note that the GST rate for cotton, not carded or combed, is different from the rate for cotton yarn. Cotton yarn is categorized based on its count, or the number of fibers in a given length of yarn. The GST rate for cotton yarn depends on its count, with rates ranging from 0% to 12%.
The Harmonized System of Nomenclature (HSN) is an internationally recognized system of names and numbers used to classify traded products. The HSN code for cotton, not carded or combed, is 5201.
The HSN code for cotton, not carded or combed, falls under Chapter 52 of the HSN. This chapter covers cotton and articles made from cotton, including yarn and fabric. The HSN code for cotton, not carded or combed, is used to identify the product for customs and tax purposes.
For small and medium business owners and startup founders in India, understanding the GST rates and HSN codes associated with cotton, not carded or combed, is crucial. The 5% GST rate and HSN code 5201 apply to raw cotton that has not undergone either carding or combing. By having this information, business owners can ensure compliance with tax laws and avoid any unnecessary penalties or fees.
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