GST Rates and HSN Code for Skins and Other Parts of Birds (HSN 6701): A Comprehensive Guide

Understanding the Goods and Services Tax (GST) implications on various commodities is crucial for businesses operating in India. This article delves into the specifics of GST rates for skins and other parts of birds, particularly focusing on Heading 6701 of the Harmonized System Nomenclature (HSN) code.

Understanding HSN Code 6701

The Harmonized System Nomenclature (HSN) code is a standardized system of names and numbers used worldwide to classify traded products. HSN code 6701 specifically covers "Skins and other parts of birds with their feathers or down, feathers, parts of feathers, down and articles thereof (other than goods of heading 0505 and worked quills and scapes)."

This heading encompasses a range of products, including:

• Bird skins with attached feathers or down
• Other parts of birds with attached feathers or down
• Feathers, whether or not on skin or other material
• Parts of feathers (e.g., barbs, quills)
• Down
• Articles made of feathers or down (excluding those under HSN code 0505, which covers skins and other parts of birds with their feathers or down, raw or simply cleaned, disinfected or preserved; powder and waste of feathers or parts of feathers)
• Worked quills and scapes are EXCLUDED.

It's crucial to accurately classify your products under HSN 6701 to ensure correct GST application. Misclassification can lead to penalties and legal complications, as detailed by the Central Board of Indirect Taxes and Customs (CBIC).

Applicable GST Rates for Skins and Other Parts of Birds

As of the latest GST regulations, the GST rate applicable to goods falling under HSN code 6701 is 12%. This rate applies uniformly across all states and union territories in India. Understanding the intricacies of GST rates is paramount for companies ensuring compliance with FSSAI Registration: Your Complete Guide | [Year] when dealing with edible bird parts or related products.

It is important to note that GST rates are subject to change based on government notifications. Regularly consulting the official GST portal and notifications issued by the CBIC is essential to stay updated. For instance, the GST Council, chaired by the Union Finance Minister Nirmala Sitharaman (as of late 2023), periodically reviews and modifies GST rates based on economic considerations and stakeholder feedback.

Impact of GST on the Industry

The implementation of GST has had a significant impact on the industry dealing with bird skins, feathers, and related articles. The unified tax structure has streamlined the tax compliance process, replacing multiple indirect taxes with a single GST. This has reduced the cascading effect of taxes and simplified the tax administration for businesses.

However, the 12% GST rate can impact the pricing and competitiveness of products falling under HSN 6701, especially for smaller businesses and artisans. Careful cost management and pricing strategies are essential to mitigate the impact of GST on profitability. The Types of TDS in India: A Comprehensive Guide also has a related impact on financial compliance.

Detailed Breakdown of Sub-headings within HSN 6701

While the overall GST rate is 12%, understanding the sub-headings within HSN 6701 is important for accurate classification and documentation.

• 67010010: Feathers, whether or not on skin or other material, other than goods of heading 0505
• 67010020: Articles made of feathers or down; of human use.
• 67010090: Other articles made of feathers or down.

Each sub-heading corresponds to a specific type of product, and businesses must accurately identify the sub-heading relevant to their goods for proper documentation and GST compliance.

GST Compliance for Businesses Dealing with Skins and Other Parts of Birds

Businesses involved in the manufacture, trade, or supply of goods under HSN 6701 must comply with the GST regulations, which include:

• GST Registration: Obtaining GST registration if the aggregate turnover exceeds the threshold limit specified under the GST Act. As of 2023, this threshold is generally INR 20 lakhs for services and INR 40 lakhs for goods. However, these thresholds can vary based on the state.
• Invoicing: Issuing GST-compliant invoices with all the required details, such as GSTIN (Goods and Services Tax Identification Number), HSN code, description of goods, quantity, value, and applicable GST rates. According to the GST Act, e-invoicing may be mandatory for businesses exceeding a certain turnover threshold, requiring the use of Invoice Registration Portal (IRP) for invoice generation.
• Filing GST Returns: Filing regular GST returns, such as GSTR-1 (outward supplies), GSTR-3B (summary return), and GSTR-9 (annual return), within the prescribed due dates. Late filing can attract penalties and interest charges.
• Payment of GST: Paying the applicable GST on a monthly or quarterly basis, depending on the business's registration status and turnover.
• Maintenance of Records: Maintaining accurate records of all transactions, including purchase invoices, sales invoices, and stock registers, for audit purposes.

Businesses should consult with tax professionals to ensure full compliance with GST regulations. Tools like Tally Prime and Zoho Books are commonly used for GST-compliant accounting and invoice management.

Exemptions and Concessions

While a general 12% GST rate applies to HSN 6701, there may be specific exemptions or concessions available under certain circumstances. For instance, the export of goods under HSN 6701 is generally zero-rated, meaning no GST is levied on exports. Similarly, certain supplies to Special Economic Zones (SEZs) may be exempt from GST.

It is important to carefully examine the GST notifications and circulars issued by the CBIC to identify any applicable exemptions or concessions. Consulting with tax advisors is recommended to determine eligibility for these benefits.

Practical Examples and Use Cases

To illustrate the application of GST on goods falling under HSN 6701, consider the following examples:

• Example 1: A manufacturer of feather dusters sells a consignment of dusters to a retailer for INR 10,000. The applicable GST rate is 12%, so the GST amount will be INR 1,200. The retailer will have to pay a total of INR 11,200 (INR 10,000 + INR 1,200) to the manufacturer.
• Example 2: A trader exports bird skins with feathers to a foreign buyer for INR 50,000. Since the export is zero-rated, no GST will be levied on the transaction. However, the trader will need to file a letter of undertaking (LUT) or pay IGST (Integrated Goods and Services Tax) and claim a refund.
• Example 3: An artisan creates decorative items using feathers sourced from local suppliers. If the aggregate turnover of the artisan exceeds the GST threshold, they must register for GST and charge 12% GST on their sales.

Challenges and Solutions

Businesses dealing with goods under HSN 6701 may face certain challenges in GST compliance, such as:

• Classification Issues: Determining the correct HSN code and sub-heading for their products can be challenging, especially when dealing with complex or composite items.
• Documentation Requirements: Maintaining accurate and detailed documentation for all transactions is crucial for GST compliance.
• GST Rate Changes: GST rates are subject to change, and businesses must stay updated to avoid non-compliance.

To address these challenges, businesses can:

• Seek Expert Advice: Consult with tax professionals or GST consultants for guidance on HSN code classification and GST compliance.
• Implement GST-Compliant Software: Utilize accounting software or ERP systems that are GST-compliant and can automate invoice generation, return filing, and record-keeping.
• Stay Informed: Regularly monitor GST notifications, circulars, and updates from the CBIC to stay informed about any changes in GST regulations.

Furthermore, proper classification ties into the wider manufacturing and supply chain. The nature of these materials can significantly affect Carbon Electrodes GST Rates & HSN Code 8545 | Expert Guide if by-products or processes are relevant. Ethylene GST Rates & HSN Code 3901: A Comprehensive Guide has less direct relation but shows the complexity in navigating HSN codes and rates.

Conclusion

Navigating the GST landscape for skins and other parts of birds (HSN 6701) requires a clear understanding of the applicable GST rates, HSN code classifications, compliance requirements, and available exemptions. By adhering to these guidelines and staying informed about the latest updates, businesses can ensure full compliance with GST regulations and optimize their tax planning.

This comprehensive guide serves as a valuable resource for businesses involved in the trade or manufacture of goods under HSN 6701, helping them to navigate the complexities of GST and maintain a competitive edge in the market.