Essential oils are a concentrated liquid containing volatile aroma compounds from plants. They are used in a wide range of industries, including cosmetics, perfumes, flavorings, and medicine. Essential oils are classified under HSN code 3301 (Essential oils and resinoids; perfumery, cosmetic or toilet preparations).
Under GST, essential oils are taxed at 18%. However, there are some exceptions to this rule. For example, if the essential oils are used for medicinal purposes or in the manufacture of Ayurvedic medicines, they are taxed at 5%. Similarly, if the essential oils are used for the manufacture of soaps, the tax rate is 12%.
Essential oils that are used for industrial purposes, such as in the manufacture of paints and varnishes, are taxed at 28%. However, essential oils that are used for the manufacture of insecticides, fungicides, and herbicides are taxed at 18%.
The HSN code for essential oils is 3301. This code includes all essential oils and resinoids, as well as perfumery, cosmetic, or toilet preparations that contain essential oils or resinoids.
However, the HSN code for essential oils is not limited to just 3301. There are several sub-categories under this code that classify essential oils based on their specific use. For example, essential oils used in the manufacture of perfumes have a different HSN code than those used in the manufacture of cosmetics.
Essential oils are an important commodity in various industries. As a small or medium-sized business owner, it is essential to understand the GST rates and HSN code for essential oils to ensure compliance with tax regulations.
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