The blog "GST on Khadi Products" discusses the applicability of Goods and Services Taxon Khadi products in India. It covers topics such as the concessional GST rate applicable to KVIC registered entities, the GST HSN code for Khadi products, and frequently asked questions related to GST on Khadi products.
Khadi, a symbol of self-reliance and a significant part of India’s cultural heritage, has always held a special place in the hearts of Indians. Khadi products are not only known for their aesthetic appeal but also for their environmental and social benefits. However, there has been a lot of confusion surrounding the GST on Khadi products. In this blog, we will discuss the various aspects of GST on Khadi products, including whether they are exempted from GST, the GST HSN code for Khadi products, and FAQs related to GST on Khadi products.
Are Khadi Goods Exempted From GST?
One of the most common misconceptions about Khadi products is that they are exempted from GST. However, this is not entirely true. While Khadi products are not completely exempted from Goods and Services Tax, they do enjoy certain benefits under the Goods and Services Tax regime. Khadi and Village Industries Commission (KVIC) registered entities are eligible for a concessional Goods and Services Tax rate of 5% on Khadi products. This means that Khadi products attract a lower Goods and Services Tax rate as compared to other products.
What Is the GST HSN Code for Khadi Products?
HSN codes, or Harmonized System of Nomenclature codes, are used to classify goods under GST. The Goods and Services Tax HSN code for Khadi products is 50.08, which falls under the category of yarn and fabrics made of natural fibers. To ensure proper classification and compliance, businesses can benefit from GST registration online, simplifying the process and ensuring accurate adherence to GST regulations.
The GST HSN Code for Khadi Products:
| Khadi Product | HSN Code |
| Khadi fabric, without embroidery | 5208 |
| Khadi fabric, with embroidery | 5810 |
| Khadi yarn | 5205 |
| Khadi garments | 6104 |
| Khadi shawls, stoles, and scarves | 6214 |
| Khadi blankets and rugs | 6301 |
| Khadi sarees, dhotis, lungis, angavastrams | 5208 |
| Khadi towels, handkerchiefs | 6302 |
Note: The above HSN codes are for informational purposes only. It is important to verify the correct HSN code for each specific product before filing GST returns.
Registration Under GST
Khadi producers and sellers who sell their products through KVIC outlets are exempt from GST registration. They do not have to register under GST, file GST returns or pay GST on their sales. This is a relief to small-scale khadi producers who do not have the resources to comply with the GST regulations.
However, if khadi producers or sellers sell their products through other channels, such as retail stores or online marketplaces, they will be required to register under GST if their annual turnover exceeds the GST threshold limit of Rs. 20 lakhs.
Input Tax Credit
The input tax credit is not available on Khadi products sold through KVIC outlets as no Goods and Services Tax applies to them. However, if khadi products are sold through other channels, an input tax credit can be claimed by the sellers on the Goods and Services Tax paid on their purchases.
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FAQs on GST on Khadi Products
Sarees made of Khadi fabric attract a GST rate of 5%. However, if the saree has embroidery work or zari work, it will attract a higher GST rate.
The latest data on India's Khadi and HSN Code 5208 exports can be found on the website of the Directorate General of Commercial Intelligence and Statistics (DGCIS).
Khadi fabrics attract a concessional GST rate of 5% if they are sold by KVIC registered entities. If Khadi fabrics are sold by unregistered entities, they attract the standard GST rate of 12%.
The GST on clothes varies depending on the type of fabric, the value of the garment, and other factors. However, Khadi clothes sold by KVIC registered entities attract a concessional GST rate of 5%. How much is GST on sarees?
Where can I find the latest data on India's Khadi and HSN Code 5208 exports?
What is the GST on Khadi fabrics?
How much is the GST on clothes?
Conclusion
In conclusion, while Khadi products are not completely exempted from Goods and Services Tax, they do enjoy certain benefits under the Goods and Services Tax regime. KVIC-registered entities are eligible for a concessional GST rate of 5% on Khadi products, and the GST HSN code for Khadi products is 50.08. We hope this blog has helped clarify some of the confusion surrounding GST on Khadi products.
We understand that navigating the Goods and Services Tax regime can be challenging, especially for businesses operating in niche industries such as Khadi products. At Vakilsearch, we strive to provide our clients with hassle-free GST compliance services. Our team of experts is well-versed in the latest GST regulations and can help you with all your GST-related queries. Get in touch with us today to avail yourself of our services and take the first step toward GST compliance.
