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Key Highlights
- All soap and organic surface-active products fall under HSN code 3401 and attract an 18% GST rate. The previous 28% GST rate for HSN code 340130 has been reduced to 18%.
- Different soap and cleansing agents have specific HSN codes under Chapter 34, such as 340111 for toilet soaps and 34012000 for liquid hand washes.
- Soap manufacturers and sellers must ensure proper tax invoicing, file GST returns (GSTR-1 and GSTR-3B), and retain transaction documents for at least 72 months.
You walk into a supermarket, pick up a soap bar, and wonder how its price is determined. Beyond the cost of production, branding, and logistics, there is a crucial component of GST (Goods and Services Tax) that influences its final price. Every product in India is taxed under a specific GST rate, and to standardise taxation, each product is assigned an HSN (harmonised system of nomenclature) code. For businesses dealing with soaps and organic surface-active products, understanding GST rates and HSN codes is essential to ensure compliance, proper invoicing, and accurate tax calculations.
Soap and Surface-active Products: HSN Codes and GST Rates
Soap and surface-active products are categorised under Chapter 34. The rates for these products became effective on 15th November 2017 but were revised through GST (Rate) Notification No. 05/2020, issued on 16th October 2020.
| Description | HSN Code | Rate (%) | Rate Revision (%) |
| Soap and organic surface-active products designed for cleansing, available in bars, cakes, or moulded shapes, with or without soap content. Additionally, organic surface-active liquid formulations specifically created for skin-washing | 3401 | 18 | 18 |
| For toilet use, including therapeutic products | 340111 | 18 | 18 |
| Soap and Organic Surface-active Products, including formulations designed for cleansing purposes, available in bars, cakes, or moulded shapes, with or without soap content. Additionally, organic surface-active solutions and preparations in liquid or cream form for skin cleansing. | 34011110 | 18 | 18 |
| Organic surface-active substances and formulations designed for use as soap, available in bars, cakes, or moulded shapes, with or without soap content. Additionally, organic surface-active solutions and skin-cleansing formulations in liquid or cream form. | 34011120 | 18 | 18 |
| Soap, organic surface-active products, and preparations designed for cleansing purposes. It covers bars, cakes, and moulded shapes, with or without soap content. Additionally, it includes liquid or cream-based organic surface-active preparations specifically formulated for skin cleansing | 34011190 | 18 | 18 |
| Other | 340119 | 18 | 18 |
| Soap, organic surface-active products, and preparations designed for cleansing purposes, available in bars, cakes, moulded pieces, or various shapes, with or without soap content. Additionally, organic surface-active formulations intended for skin cleansing, presented in liquid form or cream form | 34011911 | 18 | 18 |
| Soap, preparations, and organic surface-active products designed for use as soap, available in bars, cakes, or moulded forms, with or without soap content. Additionally, organic surface-active preparations for skin cleansing, offered in liquid or other forms | 34011919 | 18 | 18 |
| Soap and organic surface-active products and formulations designed for use as soap, available in bars, cakes, moulded pieces, or various shapes, with or without soap content; organic surface-active products and skin-cleansing preparations in liquid form or cream form | 34011920 | 18 | 18 |
| Soap and organic surface-active products and formulations intended for use as soap, available in bars, cakes, moulded pieces, or various shapes, with or without soap content; organic surface-active products and skin-cleansing preparations in liquid or cream form | 34011930 | 18 | 18 |
| Soap and organic surface-active products and formulations intended for use as soap, available in bars, cakes, or moulded shapes, with or without soap content; organic surface-active products and preparations designed for skin cleansing in liquid form or cream form | 34011941 | 18 | 18 |
| Soap and organic surface-active products and preparations designed for use as soap, available in bars, cakes, moulded pieces, or various shapes, with or without soap content. Additionally, organic surface-active products and skin-cleansing preparations in liquid form or cream form | 34011942 | 18 | 18 |
| Soap and organic surface-active products and formulations designed for use as soap, available in bars, cakes, or moulded shapes, with or without soap content; organic surface-active solutions and preparations for cleansing the skin, offered in liquid or cream form | 34011990 | 18 | 18 |
| Soap and organic surface-active products designed for cleansing purposes, available in bars, cakes, or moulded shapes, with or without soap content. Additionally, organic surface-active formulations in a liquid or cream form intended for skin cleansing | 34012000 | 18 | 18 |
| Organic surface-active products and skin-cleansing preparations, available in liquid or cream form and packaged for retail sale, with or without soap | 340130 | 18 | 18% has replaced 28% |
| Soap and organic surface-active products and formulations intended for use as soap, available in bars, cakes, moulded pieces, or various shapes, with or without soap content; organic surface-active products and skin-cleansing preparations in liquid form or cream form | 34013011 | 18 | 18 |
| Soap and organic surface-active products, along with preparations intended for use as soap, are available in various forms, such as bars, cakes, or moulded shapes. These may or may not contain soap. Additionally, organic surface-active products and skin-cleansing preparations come in liquid or cream form. | 34013012 | 18 | 18 |
| Soap and organic surface-active substances and formulations designed for use as soap, available in bar, cake, moulded, or shaped forms, with or without soap content. Additionally, organic surface-active products and skin-cleansing preparations are provided in liquid or cream form. | 34013019 | 18 | 18 |
| Soap and organic surface-active products and formulations intended for use as soap, available in bars, cakes, or moulded forms, with or without soap content; organic surface-active products and skin-cleansing preparations in liquid or cream form | 34013090 | 18 | 18 |
GST Compliance Requirement for Soap Manufacturers and Sellers
If you are in the soap-making or selling business, here are the GST compliance requirements related to this product.
- Tax Invoicing: Ensure invoices include mandatory information such as supplier's and purchaser's GSTIN, description of items, HSN code, quantity, per unit price, applicable CGST (central goods and services tax) and SGST (state goods and services tax) rates, and place of supply. Generate an e-way bill for transactions exceeding ₹50,000.
- GST Returns Filing: File GSTR-1 (details of outward supplies) by the 11th of the succeeding month and GSTR-3B (summary of inward and outward supplies) by the 20th of the succeeding month. Transfer the collected GST to the government by filing GSTR-3B.
- Document Retention : Maintain records of all documents related to transactions, such as invoices, e-way bills, GST payments, etc., for at least 72 months
Keeping GST Compliance Simple
Understanding GST rates and HSN codes for soap products is essential for businesses to ensure compliance and avoid tax complications. With the GST rate set at 18% across various soap categories, manufacturers and sellers must stay updated with tax regulations, maintain accurate invoices, and file returns on time. Proper documentation and adherence to GST requirements not only streamline business operations but also prevent legal issues. Whether you’re a small-scale soap maker or a large retailer, staying informed about these tax structures will help in smooth financial planning and hassle-free transactions in the competitive soap industry.
FAQS - FREQUENTLY ASKED QUESTIONS
What is the HSN Code for soap and organic surface-active products used for cleansing?
The harmonised system of nomenclature (HSN) code for soap and organic surface-active products used for cleansing is 3401. This category covers various forms, such as bars, cakes, moulded shapes, and liquid or cream formulations specifically designed for skin washing.
What is the GST rate for soap and organic surface-active products?
The goods and services tax (GST) rate for soap and organic surface-active products is 18%. This applies to solid and liquid cleansing formulations, whether they contain soap or not.
Has there been any revision in the GST rate for soap products?
Yes, the GST rate for HSN code 340130 has been revised from 28% to 18%. This change ensures that soap and organic surface-active products are now taxed at a lower rate, making them more affordable.
What does HSN code 340111 cover?
HSN code 340111 includes soap and organic surface-active products designed for cleansing. These products may be available in bars, cakes, or moulded forms and may or may not contain soap. It also covers liquid and cream-based skin-cleansing preparations.
What is the difference between HSN codes 34011110 and 34011120?
Both codes cover soap and organic surface-active substances in various shapes, but 34011110 specifically refers to organic surface-active substances used as soap. Whereas, 34011120 covers a broader category, including liquid or cream-based cleansing preparations in addition to solid forms.
What does HSN code 340119 cover?
HSN code 340119 includes soap and organic surface-active products in solid and liquid forms. It covers various product shapes such as bars, cakes, and moulded pieces. These products are designed for skin cleansing, whether or not they contain soap.
What is the significance of the HSN code 34011911?
HSN code 34011911 applies to soaps and organic surface-active products in solid shapes like bars and cakes. These products may contain soap or be made with alternative cleansing agents and are specifically formulated for washing the skin.
How do HSN codes 34011920 and 34011930 differ?
Both codes apply to solid and liquid soap formulations, but 34011920 includes bars, cakes, and liquid-based organic surface-active preparations. While 34011930 also covers similar forms but may specifically include additional skin-cleansing preparations.
What types of products fall under the HSN code 34011941?
This code covers a wide range of soap and cleansing products, including solid bars and liquid formulations. It includes soap-containing and non-soap-based organic surface-active agents used for washing the skin.
Is liquid hand wash covered under HSN code 34012000?
Yes, liquid hand wash falls under HSN code 34012000, which includes organic surface-active products and skin-cleansing preparations in liquid or cream form. These products are typically packaged for retail sale.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
