Candles HSN Codes with GST Rates and Impact on Businesses

Learn about the HSN codes of candles with GST rates in India and understand its impact on businesses.
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3 min
22-November-2024

What is the HSN code for candles in India?

Category HSN code Description GST rate
Candles and tapers 3406 HSN code 3406 covers candles, tapers, nightlights, and similar products. These items are categorised under Chapter 34 of the HSN classification system, which deals with soap, organic surface-active agents, and waxes. Candles of all types, including scented, decorative, and plain, fall under this HSN code. 18.00%


The HSN code 3406 is applied to candles, which makes it easier for businesses to classify and understand tax rates, both in domestic trade and international commerce. Accurate use of the HSN code ensures compliance with GST regulations in India, allowing businesses to calculate the applicable tax.

Detailed explanation of HSN code for candles under chapter 34

The HSN code for candles, 3406, is included under Chapter 34, which primarily deals with soaps, waxes, and related products. Candles of all types, including wax candles, decorative candles, and nightlights, are classified under this code. This classification is crucial for determining the appropriate GST rate and ensuring compliance with India's tax laws. HSN code 3406 simplifies trade and ensures a uniform tax rate across different states.

Impact of GST on Candle Businesses in India

The implementation of GST in India has had a significant impact on candle businesses. Before GST, the taxation on candles varied across states, causing a fragmented market with different compliance requirements. With the introduction of GST, there is a unified tax regime leading to easier compliance and reduced logistic complexities. Candles now fall under the 12% tax bracket under GST, slightly higher than some previous state tax rates. This has marginally increased costs for manufacturers and consumers. However, the improved efficiency and transparency in the supply chain have offset some cost burdens. Overall, while the GST regime has streamlined operations, it necessitates adjustments in pricing strategies for candle businesses to maintain profitability.

Conclusion

The correct use of HSN codes, such as 3406 for candles, is essential for businesses to maintain tax compliance. Proper classification ensures that businesses can accurately calculate GST and streamline their trading processes. For further business expansion, you may also consider a business loan to enhance your operations.

Frequently asked questions

How do I find the correct HSN code for different types of candles?
To find the correct HSN code for different types of candles, refer to the GST Council’s guidelines or the HSN section on the official GST portal. Candles generally fall under HSN code 3406, but sub-categories like scented candles or decorative candles may have specific classifications. Consulting a tax advisor or using a professional GST software can help ensure accuracy in classification. It is crucial to verify the code to avoid tax discrepancies.

What documents are required for importing candles with the correct HSN code?
For importing candles, the required documents include an import-export code (IEC), GST registration, commercial invoice, bill of lading or airway bill, and packing list. The HSN code, such as 3406 for candles, must be correctly mentioned in the commercial invoice and other customs documents. Additionally, any applicable certification, like product safety compliance, should be provided to ensure smooth customs clearance and avoid delays in the import process.

How can I avoid penalties related to incorrect HSN codes for candles?
To avoid penalties for incorrect HSN codes, ensure that the correct HSN code is applied to all types of candles, such as 3406 for regular and scented candles. Using a reliable GST software or consulting a tax expert can help with accurate classification. Regularly updating your knowledge on any changes in HSN code rules and performing routine compliance checks can also prevent errors and ensure proper GST filing, thus avoiding penalties.

What is the HSN code for scented candles?
The HSN code for scented candles is 3406, which falls under Chapter 34 of the HSN classification system. This chapter covers soaps, waxes, and other related products, including various types of candles. Scented candles, despite their additional fragrance features, are categorised under this general HSN code for candles. Correct usage of this code ensures that businesses are complying with GST regulations and paying the correct tax rates for scented candles in India.

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