GST on Furniture: Rates & HSN Codes AY 2025-26

GST on Furniture and Raw Materials: AY 2025-26 Updates

Navigating the GST landscape for furniture businesses can be complex. Staying informed about the latest rates and Harmonized System of Nomenclature (HSN) codes is crucial for compliance and accurate tax calculations. This guide provides a detailed breakdown of the applicable GST rates for furniture and its raw materials for the Assessment Year (AY) 2025-26.

Understanding GST and HSN Codes

The Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services in India. HSN codes are used to classify goods for GST purposes. These codes ensure uniformity in taxation and facilitate international trade. The government revises rates and HSN classifications periodically, making it essential for businesses to stay updated. Staying on top of the gst compliance ay 2025 is important.

Current GST Rates on Furniture

The GST rates for furniture generally fall under two main categories:

• 12% GST: This rate typically applies to furniture made of certain materials, such as bamboo or rattan, and specific types of furniture like hospital beds.
• 18% GST: This is the standard rate applicable to most types of furniture, including wooden furniture, metal furniture, plastic furniture, and upholstered furniture.

It's vital to correctly classify your furniture items based on their composition and intended use to determine the applicable GST rate.

GST Rates on Raw Materials for Furniture

The GST rates on raw materials used in furniture manufacturing vary depending on the specific material:

• Wood: The GST rate on wood can vary depending on the type of wood and its stage of processing. Generally, wood attracts an 18% GST. Processed timber might attract a different rate.
• Metal: Metal sheets and components used in furniture typically attract an 18% GST. Ensure you have proper documentation to claim input tax credit.
• Plastic: Plastic sheets and components for furniture usually attract an 18% GST.
• Foam and Upholstery: Materials used for upholstery, such as foam, fabric, and leather, typically attract an 18% GST.
• Adhesives and Paints: These materials usually attract an 18% or 28% GST, depending on their specific classification under HSN codes. You should review how any potential union budget 2026 changes might impact raw material costs.

Key HSN Codes for Furniture and Raw Materials

Here are some key HSN codes related to furniture and its raw materials. Please note that these are indicative and subject to change. Always refer to the official GST portal (GST.gov.in) for the most up-to-date information.

• HSN Code 9401: Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof.
• HSN Code 9402: Medical, surgical, dental, or veterinary furniture (for example, operating tables, examination tables, hospital beds with mechanical fittings); barbers' chairs and similar chairs, having rotating as well as both reclining and elevating movements; parts of the foregoing articles.
• HSN Code 9403: Other furniture and parts thereof.
• HSN Code 4407: Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm.
• HSN Code 3920: Other plates, sheets, film, foil and strip, of plastics, non-cellular and not reinforced, laminated, supported or similarly combined with other materials.

Using correct indian accounting standards ind is a good way to ensure financial accuracy. The Central Board of Indirect Taxes and Customs (CBIC) provides detailed information and updates on HSN codes and GST rates. Businesses should regularly consult these resources.

Input Tax Credit (ITC) on Raw Materials

Businesses can claim Input Tax Credit (ITC) on the GST paid on raw materials used in the manufacturing of furniture. This helps reduce the overall tax burden. To claim ITC, ensure that:

• You have a valid GST registration.
• You have a valid tax invoice from the supplier.
• The supplier has filed their GST returns.
• The raw materials are used for business purposes.

ITC can be a significant benefit, improving the profitability of your furniture business. Keep detailed records to support ITC claims. The deadline to ensure dpdp act compliance to avoid penalties.

GST Exemptions for Specific Furniture Items

Certain types of furniture may be exempt from GST. This often includes furniture used by charitable organizations or furniture specifically designed for use by persons with disabilities. Check the official GST notifications and circulars for detailed information on exemptions.

Compliance and Record Keeping

Maintaining accurate records is essential for GST compliance. This includes:

• Maintaining records of all purchases and sales.
• Properly classifying goods and services under the correct HSN codes.
• Filing GST returns accurately and on time.
• Reconciling your books of accounts with your GST returns.

Failure to comply with GST regulations can result in penalties and legal action. Consider using GST software to automate your GST compliance process. A well-implemented payroll accounting guide 2025 can also assist with proper documentation and tax calculations.

Impact of GST on Furniture Prices

The implementation of GST has generally simplified the tax structure for the furniture industry. However, the overall impact on prices depends on various factors, including the GST rates on raw materials and the ability of manufacturers to claim Input Tax Credit. Understanding the current income tax changes for AY 2025-26 may also indirectly influence business decisions.

Recent Changes and Updates

Stay informed about any recent changes or updates to GST rates and HSN codes through official government notifications, circulars, and press releases. The CBIC website is a reliable source for this information. Subscribing to industry newsletters and attending GST seminars can also help you stay updated.

Conclusion

Understanding the GST rates and HSN codes for furniture and its raw materials is crucial for compliance and efficient tax management. By staying updated on the latest regulations and maintaining accurate records, furniture businesses can navigate the GST landscape effectively and minimize their tax burden. Always consult with a tax professional for personalized advice.

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Disclaimer

This article is for educational purposes only and does not constitute professional legal, tax, or financial advice. The information provided is based on public sources and may change over time. We are not responsible for any actions taken based on this content. Please consult a qualified professional for specific advice related to your situation.