GST or Goods and Services Tax is a comprehensive tax levied on the supply of both goods and services in India. The GST regime has replaced a host of indirect taxes, including VAT, excise duty, and service tax. Under GST, goods have been classified into Chapters and HSN (Harmonised System of Nomenclature) codes have been assigned to each Chapter to facilitate uniform classification across the country.
Chapter 31 of the GST Act deals with fertilizers, which are essential for agriculture and horticulture. Fertilizers are classified into different categories based on their composition and usage. The GST rates for each category of fertilizers and their HSN codes are as follows:
Urea is a nitrogenous fertilizer that is widely used in the agricultural sector. The GST rate on urea is 5%.
These fertilizers are classified under different sub-headings depending on their composition and usage. The GST rate on these fertilizers is 12%.
Organic fertilizers are made from natural substances like manure, compost, and plant residues. The GST rate on organic fertilizers is 5%.
Bio-fertilizers are living microorganisms that enhance soil fertility and plant growth. The GST rate on bio-fertilizers is 5%.
Fertilizer grade phosphoric acid is used in the production of phosphate fertilizers. The GST rate on fertilizer grade phosphoric acid is 18%.
Mixes and blends of fertilizers are used to provide a balanced mix of nutrients to crops. The GST rate on mixes and blends of fertilizers is 12%.
Fertilizer grade potassic is used in the production of potash fertilizers. The GST rate on fertilizer grade potassic is 5%.
Fertilizer grade ammonium sulphate is used in the production of nitrogen and sulphur-based fertilizers. The GST rate on fertilizer grade ammonium sulphate is 18%.
Apart from the GST rates and HSN codes, businesses also need to be aware of the compliance requirements under the GST regime. They need to maintain proper records, file returns, and comply with the invoicing requirements to avoid penalties and legal consequences.
Understanding the GST rates and HSN codes for fertilizers is crucial for businesses operating in this sector. The GST rates vary depending on the type of fertilizer and can range from 5% to 18%. Businesses need to comply with the invoicing and record keeping requirements to avoid legal consequences. We hope that this article has provided a comprehensive guide on the GST rates and HSN codes for fertilizers falling under Chapter 31 of the GST Act.
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