New GST Rates on Jute and Jute Products in India

The Goods and Services Tax (GST) has streamlined the taxation system in India, bringing uniformity across various industries. For the jute industry, GST rates are determined based on the type of jute product and its classification under the Harmonized System (HS) Code. This blog provides a comprehensive overview of GST rates applicable to jute and jute goods, as per the decisions taken in GST Council Meetings.

What is Jute?

Jute is a natural fiber known for its versatility, eco-friendliness, and biodegradability. It is widely used in the production of bags, ropes, carpets, fabrics, and other goods. The Indian jute industry plays a significant role in the global market, and understanding the GST rates applicable to jute products is essential for manufacturers, traders, and consumers.

GST Rates for Jute and Jute Goods 

The GST rates for jute products vary depending on their classification under HS Codes. Below is a detailed breakdown of the GST rates for different jute items:

1. Jute Fibers and Yarn 

Raw or processed jute fibers (HS Code: 53031010): 5%
Jute cutting (HS Code: 53039010): 5%
Single yarn of jute (HS Code: 53071010): 5%
Multiple folded or cabled yarn of jute (HS Code: 53072000): 5%

2. Jute Fabrics

Carpet backing cloth containing 100% jute (HS Code: 53101011): 5%
Sacking cloth containing 100% jute (HS Code: 53101012): 5%
Hessian cloth containing 100% jute (HS Code: 53101013): 5%
Decorative fabrics of jute (HS Code: 53109020): 5%
Polyethylene laminated jute fabrics (HS Code: 59039020): 12%
Jute fabrics impregnated or coated (HS Code: 59070093): 12%

3. Jute Bags and Sacks 

Jute hand bags/shopping bags (HS Code: 42022230): 12%
Jute corn sacks (HS Code: 63051020):
- Less than Rs. 1000 per piece: 5%
- More than Rs. 1000 per piece: 12%
Jute hessian bags (HS Code: 63051030):
- Less than Rs. 1000 per piece: 5%
- More than Rs. 1000 per piece: 12%
Plastic-coated or paper-lined jute bags (HS Code: 63051060):
- Less than Rs. 1000 per piece: 5%
- More than Rs. 1000 per piece: 12%

4. Jute Carpets

Carpets of blended jute (HS Code: 57050031): 12%
Carpets of coir jute (HS Code: 57050032): 12%
Other carpets of jute (HS Code: 57050039): 12%

5. Jute Decorative Items 

Jute decorative plants/artificial flowers (HS Code: 67029010): 28%

6. Other Jute Products

Jute tarpaulins (HS Code: 63061910):
- Less than Rs. 1000 per piece: 5%
- More than Rs. 1000 per piece: 12%
Tents of jute (HS Code: 63062910):
- Less than Rs. 1000 per piece: 5%
- More than Rs. 1000 per piece: 12%
Jute soil savers (HS Code: 63051080): 18%

Key Observations

Lower GST Rates for Basic Jute Products: Raw jute fibers, yarn, and basic fabrics attract a GST rate of 5%, making them affordable for manufacturers and exporters.
Higher GST Rates for Value-Added Products: Laminated fabrics, decorative items, and artificial flowers made of jute attract higher GST rates (12%-28%), reflecting their premium nature.
Price-Based GST Differentiation: For certain jute bags and sacks, GST rates vary based on the price per piece. Products priced below Rs. 1000 attract a lower GST rate of 5%, while those above Rs. 1000 are taxed at 12%.

Impact on the Jute Industry

The GST rates for jute products are designed to promote the use of eco-friendly materials while ensuring fair taxation for value-added goods. Lower GST rates for raw jute and basic fabrics encourage exports and support the domestic jute industry. However, higher rates for decorative and laminated products may impact their affordability.

Conclusion

Understanding GST rates for jute and jute goods is crucial for businesses operating in this sector. The Indian jute industry, with its diverse range of products, benefits from favorable GST rates for basic items while contributing to the economy through value-added goods. By adhering to these rates, manufacturers and traders can ensure compliance and optimize their operations.

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Source: IJMA, CBIC

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