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Published on:

May 21, 2025

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GST rates and HSN code 8523 for Discs, Tapes

India's Goods and Services Tax (GST) is a major tax overhaul that has reformed India's indirect taxation system into one which is transparent, efficient, and uniform across states. It was introduced to replace other indirect taxes like VAT, excise duty, and service tax. GST is making business easy and ensuring a proper process of taxation. All goods and services in the GST regime are grouped based on HSN codes, which institutionalize taxation and trade description. HSN code 8523 for discs, tapes, solid-state non-volatile storage devices, smart cards, etc., and other media for sound, video, or data recording is one such illustration. Storage media are therefore extensively used across business from IT and entertainment to security and communications. Understanding the GST rate for HSN 8523 is important for manufacturers, distributors, importers, and retailers to comply and maximize tax payments.

Knowledge of HSN Code 8523

HSN code 8523 is mainly utilized for storage media, recorded or unrecorded. Some of the widely classified products under this HSN code are:

1. Compact Discs (CDs): Blank and recorded CDs.

2. Digital Versatile Discs (DVDs): Software, movies, and data storage.

3. Blu-ray Discs: Storage media with high definition.

4. USB Flash Drives: Solid-state storage devices.

5. Memory Cards: For smartphones, cameras, and computers.

6. Magnetic Tapes and Cassettes: Legacy recording and backup systems.

GST Rates Applicable to HSN 8523

GST rates on products under HSN 8523 differ depending on their use and type. The government has fixed different GST slabs for different products under this category:

HSN Code	Product Type	GST Rate
8523	Blank CDs/DVDs	18%
8523	Recorded CDs/DVDs	18%
8523	Blu-ray Discs	18%
8523	USB Flash Drives	18%
8523	Memory Cards	18%
8523	Smart Cards	18%
8523	Magnetic Tapes & Cassettes	18%

GST Impact on Pricing & Consumer Behaviour

1. Higher Prices: In comparison to the previous VAT system (5-15%), GST at 18% has made storage devices more expensive.

2. Digital Storage Switch: Higher rates have hastened the transition away from physical media (CDs, DVDs) towards cloud storage options.

3. Growth in E-commerce: Ease of GST compliance has encouraged greater online sales of storage media throughout India.

Composition of GST Components on HSN 8523

GST on storage media under HSN 8523 is composed of three components:

1. CGST (Central GST): Charged on intra-state sales, to be shared with the central government.

2. SGST (State GST): Charged in addition to CGST on intra-state sales and received by the state government.

3. IGST (Integrated GST): Charged on inter-state and foreign sales, received by the central government and subsequently transferred to states.

For instance, if a USB drive is being sold within a state for ₹1,000, CGST (9%) and SGST (9%) are levied, but an inter-state sale attracts IGST (18%).

Exemptions or Special Cases Under GST for HSN 8523

1. No general exemptions are currently available for storage media under GST. But there can be some exemptions or concessions:

2. Supplies to government educational institutions may be eligible for a lower rate of tax or exemption.

3. Imports of storage media are subject to zero-rated GST, whereby exporters can claim input tax credit (ITC).

4. The second-hand goods margin scheme could lower the GST burden on refurbished storage devices.

GST Compliance & Documentation for HSN 8523

Companies handling discs, tapes, and storage media need to have proper documentation for compliance:

1. GST Invoice: Should have HSN code 8523, tax rates, and GSTIN details.

2. E-Way Bill: Mandatory for consignments over ₹50,000 for inter-state movement.

3. GSTR-1 & GSTR-3B Filing: Periodic GST return filings for making tax payments and claiming ITC.

Explanation of GST Applicability

1. Standard Rate of 18%: The majority of electronic storage media classified under HSN 8523 are charged an 18% GST. Examples include USB flash drives, memory cards, and smart cards.

2. Input Tax Credit (ITC): Entities that buy such products for manufacturing or resale purposes can avail themselves of ITC, lowering their total tax burden.

3. Customs & Import Duty Implications: Storage media imported under HSN 8523 may also incur customs duties apart from GST.

Impact of GST on the Storage Media Industry

1. Decline in Tax Complexity: Before GST, storage media were subject to different VAT and service tax regimes. GST has made tax compliance easier.

2. Higher Costs for Consumers: Certain products that previously enjoyed lower VAT rates now come under the 18% GST category, increasing their costs.

3. Boost for Online and E-Commerce Sales: With easy taxation, e-commerce companies can sell storage media state-wise without tax issues.

Conclusion

8523 HSN code is an important code to classify different storage media so that uniform taxation can be applied under the GST regime. Classification helps businesses that are involved in selling products such as CDs, DVDs, USB drives, memory cards, and smart cards to handle taxes with ease. With a uniform flat rate of 18% of GST, producers, wholesalers, and dealers should be aware of the tax rate they have to pay and make use of Input Tax Credit (ITC) to minimize their costs. The right information regarding GST rules keeps businesses profitable and in line, particularly with the increased need for storage media in digital form.

For commercial organizations that engage in the importation, selling, or production of storage media, it is necessary to comprehend GST implications so as not to have tax complications. For accuracy and compliance, it is advisable that one gets advice from a tax consultant or looks at official GST notifications and government circulars. Being in touch with regulatory information can ward off legal problems and enable the business to run smoothly.

FAQs on GST and HSN Code 8523

1. What is the GST rate applicable on USB flash drives?

The GST rate on USB flash drives under HSN 8523 is 18%.

2. Can businesses avail Input Tax Credit (ITC) on the purchase of storage media?

Yes, businesses enrolled under GST can avail ITC on storage media if for business usage.

3. Are imported storage media liable for extra taxes?

Yes, in addition to GST, imported items might have customs duty and IGST depending on the import value.

4. Do CDs and DVDs bear the same rate as USB drives?

Yes, blank or recorded CDs/DVDs, as well as USB drives, charge an 18% GST.

5. Did GST drive up the cost of storage media?

Whereas in certain instances, GST has put the prices up relative to the earlier regime of VAT, particularly where VAT was below 18%.

6. Do software-loaded storage devices come under HSN 8523?

It varies based on the classification. Blank storage devices (memory cards, USB drives) come under HSN 8523 with 18% GST. But pre-loaded software storage devices can be classified under a different HSN code and have a different GST rate based on the nature of the software and the licensing model.