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Published on:

September 30, 2024

Udeetta Sarma

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Basics of GST

Rice HSN Code & GST Rate - 1006

Rice is a staple food in India, constituting more than half the total grain production and deriving there from about 20% kcal available per day to more than a billion people of the subcontinent. Due to its classification under the Goods and Services Tax (GST) regime that impacts prices directly for both consumers and producers and in turn for over 65 per cent of the population who consume rice on a daily dietary basket. Here, the importance of HSN code arises as HSN systematically classifies rice thus ensuring apt tax being debited on that based on its variety and condition of processing. Alternatively, GST rates could range anywhere from 0% for plain staple rice to 5% for some processed forms.

Through this blog, we plan to approach the HSN code for rice, study the different GST rates that apply across categories of rice and mention separate HSN codes for paddy as well as broken rice enabling ease of reference in these multiple sections.

What is the HSN Code?

HSN means Harmonized System of Nomenclature. This is an international nomenclature defined by the World Customs Organization (WCO) designed to classify goods being traded. The HSN code system established universal nomenclature for goods, thereby producing a systematic classification of products worldwide including all the possible aspects of international and domestic taxation. The HSN code is obligatory under GST in India since it determines the goods and tax rates.

If you are looking for other HSN codes, refer to this manual.

HSN Code for Rice (HSN 1006)

The HSN Code for Rice is 1006. This code falls under the larger section of Chapter 10 of the HSN- cereal. HSN code 1006 is for Rice, not in Husk (paddy/dhan unpolished or semi-polished, milled, parboiled) or Broken rice; Garlic [other than fresh or chilled] and Ginger. The following are the subcategories under this classification that provide us with information about various GST rates that have been levied concerning different types of rice units used for consumption:

HSN Code	Product Description	GST Rate (%)	CESS (%)	Effective From	Recent Revision of Rate
1006	The general category of Rice	5%	0%	July 1, 2017	5%
1006	General Rice, exempted	0%	-	July 1, 2017	0%
100610	Paddy or Rough Rice, still in the husk	5%	0%	July 1, 2017	5%
10061010	Paddy/Rough Rice intended for sowing	5%	0%	July 1, 2017	5%
10061090	Paddy/Rough Rice, other types	5%	0%	July 1, 2017	5%
10062000	Husked (Brown) Rice	5%	0%	July 1, 2017	5%
100630	Semi or Fully Milled Rice, including polished/glazed	5%	0%	July 1, 2017	5%
10063010	Parboiled Rice (semi or fully milled)	5%	0%	July 1, 2017	5%
10063020	Basmati Rice (semi or fully milled)	5%	0%	July 1, 2017	5%
10063090	Other Milled Rice, including polished or glazed	5%	0%	July 1, 2017	5%
10064000	Broken Rice	5%	0%	July 1, 2017	5%

You might also be interested in Fertilisers HSN Code GST Rate - 3101.

Understanding HSN Codes for Rice

This table shows broad categories of rice types under HSN codes with a brief description and how they stand out regarding colour, taste, aroma and texture. Whether they be plain grains tucked in a husk to more aromatic types like Basmati and Jasmine, each kind of rice is distinct enough that it lends itself well to multiple forms of meal preparations. By the end of this, you should be able to differentiate between these rice types better and know which is the best pick depending on your purpose; either for cooking or for business.

Category	Description
Rice in Husk (Paddy or Rough)	Under this category, rice is in its most natural form, with the husk still intact. This includes long-grain, medium-grain, and short-grain varieties, which are typically used for many cooking purposes. It represents the first stage of rice before it is further processed.
Semi-milled or Wholly Milled Rice	This category covers rice that has been partially or fully milled, which means the outer layers have been removed. It includes well-known varieties like white rice, brown rice, and parboiled rice. White rice is a popular staple, while brown rice is considered a healthier choice due to its intact bran layer. Parboiled rice is processed differently, which changes its texture and nutritional properties.
Broken Rice	Broken rice includes grains that break during milling. While these grains are smaller, they are still very useful—often turned into rice flour or used in various other food preparations. Broken rice also finds use as feed for animals, supporting sustainable practices.
Basmati Rice	Famous for its fragrance and long-grain structure, Basmati Rice is loved around the world. It adds a special aroma to dishes like biryani and pulao. When cooked, the grains of Basmati remain fluffy and separate, contributing to their distinctive texture and making it an iconic ingredient in many cultural dishes.
Other Aromatic Rice	This category includes aromatic varieties like jasmine rice and black rice. Jasmine rice has a floral aroma, while black rice has a unique, nutty flavour. These types of rice are cherished for their distinctive aromas and play an important role in enriching the flavour of many dishes.
Other Rice	The 'Other Rice' category includes a variety of unique types such as glutinous rice, wild rice, and red rice. Glutinous rice is often used for its sticky texture, wild rice offers a hearty and nutty flavour, and red rice is known for its vivid colour and nutty taste. Each of these contributes to the diversity of the global rice selection.

If you are looking to learn more about other HSN codes you can refer here.

GST Rates on Rice

How GST Rates on Rice Vary according to Pre-packaged, labelled or bulk. Let us discuss the GST rates on rice which are led when bought in a few cases:

1. Rice (other than pre-packaged and labelled) -0% GST

This includes unbranded/unpackaged rice. This category constitutes the bulk of the rice sold in wholesale markets/traders and retail outlets, which benefits consumers with no tax on top.

2. Packaged & labelled rice — 5% (Source)

For rice sold with any kind of packaging or labelling, manufacturers are already taxed at 5% GST. Retail-branded rice falls under this category

3. Soldier(HSN Code 100610) – Exempted from GST

Paddy, the rice in husked or rough form is mostly tax-free, during the pre-GST era as well it was taxed between 2-3%. Millers and farmers had been demanding the exemption as paddy is the raw form of rice that needs processing before it reaches consumers.

4. Husked or brown rice (HSN Code 100620) – 0% GST

Husked rice, which retains its bran layer and is often referred to as brown rice, also falls under the nil-rated category.

5. Milled or polished rice (HSN Code 100630) — 5% GST

processed rice (this can be milled and polished white or parboiled) Packaged and labelled polished rice varieties consumed in households will be taxed with a 5% GST rate.

6. Broken Rice (HSN Code 100640) – 5% GST

Broken rice, a by-product of the milling process, will also incur 5% GST when sold in packaging or original form. Broken rice is often used in pet food and a few culinary applications.

Breakdown of HSN Codes for Different Types of Rice

1. HSN Code for Rice in the Husk (Paddy) – HSN 100610

Paddy refers to raw rice. Paddy Meat falls under HSN code: 100610 Under the GST regimen, paddy is covered under an excused item — zero-rated. The paddy is the raw form of rice before processing so this helps in lower environmental impact and hence less pollution.

2. HSN Code for Brown Rice (Husked) – 100620

Brown rice - Brown rice keeps the brand of layer and therefore is healthier but not as polished as white rice. Husked or Brown Rice (100620) Full HSN Code Similarly, brown rice attracts GST exemption if packaged and labelled pack at the retail sale/price. But in the case of a specific variety — once it is branded and labelled—it may attract a 5% tax under GST.

3. HSN Code for Semi-milled or Wholly-milled Rice – HSN 100630

White rice (polished) which is widely consumed comes under this category. Polished rice (HSN code 100630) If the rice is being sold in a pre-packaged and labelled, it is taxable at 5% ITP In loose form, it benefits from a zero-GST status.

4. HSN Code for Broken Rice – HSN 100640

Broken rice comes from the milling of rice and results when long-grain rice is broken most often sold as a separate product. Then the HSN code of broken rice is 100640-full Though broken rice is generally used for cattle feed or in a few cuisines, if it becomes ready-to-eat and labelled, then it falls under the 5% GST slab.
The entire HSN code list can be accessed through the official website.

If you are looking for HSN codes for other agricultural equipment refer to “HSN Code & GST on Agriculture Equipment”.

Impact of GST on Rice Industry

The GST introduction has eased the tax structure for agricultural-based products like rice. The increase in the GST rate nets about the rise and decline movement of domestic paddy prices is seen as positive for the change equilibrium positions between unbranded-rice and branded-rice enforcing duopolies representation of oligopsony-trade interfaces. However, having GST exemption on loose/bulk rice will ensure that the consumers are not overburdened with additional taxes, especially in rural areas where bulk buying happens more.

1. For Farmers:

They can sell it without the burden of GST, as paddy is zero-rated under the Goods and Services Tax — ensuring that farmers benefit from this policy. This way the tax regime does not affect the cost of farming and sale.

2. For Millers and Traders:

Millers have to maintain all the HSN code and GST rates for paddy-to-rice conversion & further refine it into different types of rice (brown, polished). However, there will be a 5% GST on rice consumed in packets and labelled and this will impact the cost structure for businesses branding & packaging the rice.

3. For Consumers:

Based on our purchasing patterns, we have all been impacted differently as consumers. The zero-GST rule allows local farmers to buy rice in bulk and so affordable. However, customers who opt for branded rice may have to pay a little more as 5% GST is levied on packaged rice.

Conclusion

HSN Code and GST Rate for Rice is vital for all the stakeholders (right from Farmers to End Consumers) in the rice supply chain to be aware of HSN code and GST rate concerning rice. As per HSN code 1006, whole rice is one of the million different forms of rice and paddy OR brown rice attracts no GST while pre-packaged and labelled rice carries a GST levy (5%). Packed and labelled broken rice will also attract a 5% tax slab. This allows consumers to purchase bulk or unbranded rice at a lower tax rate, while businesses can comply with the correct HSN Code.

Considering rice is a staple diet in the country, it is not imposing much tax and at the same time sending all those loose rice that communities consume to the GST regime. This distinction will help businesses and consumers make a more informed decision as to what the contract is for those rice transactions.

Simplify Your GST Compliance with Swipe

Instead of the typical chaos with rice, GST and all, we have tall trees like Android Pay! Our intuitive GST billing and accounting software help you maintain the code with mercilessness whether you are a farmer, miller or trader. Use Swipe to manage HSN codes, automate tax calculations and create GST-compliant invoices in minutes. Just focus on growing your business and leave the paperwork to us. Sign up at Swipe and simplify your tax management on a built-for-India product.

FAQ

1. What is the HSN code for rice?

For rice, the HSN code is 1006 which contains all variety paddy- husked rice semi-milled or wholly milled rice and broken rice.

2. What is the GST rate on pre-packaged and labelled rice?

The items defined as 'virgin refers to un-finished rice which is available in the husk, and covered with separate outside skin garnish (rice bran),” and does not attract any GST.

3. Is there any GST on paddy (rice in the husk)?

Paddy (HSN 100610) on the other hand, is a zero-rated item for GST, hence there is NIL payable here as well.

4. What is the GST rate for broken rice?

Processed broken rice (HSN 100640) when sold in pre-packaged and labelled form is subjected to a GST rate of 5%.

5. Does husked or brown rice attract GST?

Brown or Husked rice GST Exempt (HSN 100620) if unbranded packed and labelled then 5% GST apply

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