GST Rate & HSN Code for Furniture: What You Need to Know

• GST on furniture varies depending on the type of material, with the general rate being 18%.
• Bedding, mattresses, and similar stuffed furnishings are taxed at a lower GST rate compared to other furniture items.
• Proper understanding of HSN codes helps in correct tax classification and avoids tax-related issues.
• The GST rates on lamps, lighting fittings, and other furniture accessories also impact the final price.

Ever wondered how much of your furniture purchase varies due to taxes? In India, the Goods and Services Tax (GST) applies to various furniture products, ranging from bedding to lighting fixtures.Whether you’re a business owner, a buyer, or just curious, it's important to understand the nuances of GST rates and HSN codes that apply to different types of furniture. Let’s dive into this essential topic!

In India, GST on furniture is categorised based on the material and the type of product. Furniture items are generally taxed under a standard rate of 18% GST.
However, some furniture items like mattresses, cushions, and stuffed furnishings fall under different rates.

The furniture industry includes a wide range of products, each with its unique purpose, design, and usage. Different categories, from bedding and mattresses to decorative lighting fixtures, fall under specific GST rates and HSN codes.Let's take a look at the same.

Bedding, Mattresses, and Similar Stuffed Furnishings

• GST Rate: 12%
• HSN Code: 9404

Bedding, mattresses, cushions, and similar stuffed furnishings are a popular category of furniture with a slightly reduced GST rate. These products come under HSN Code 9404 and are taxed at 12%. This lower rate applies to most soft furnishings used in homes and offices, helping consumers manage costs more effectively.

Lamps and Lighting Fittings

• GST Rate: 18%
• HSN Code: 9405

Lamps, lighting fittings, and illuminated signs fall under HSN Code 9405, and these are taxed at an 18% GST rate. This category includes all types of lamps, lighting fixtures, and illuminated nameplates used for decorative or functional purposes. Prefabricated Furniture

• GST Rate: 28%
• HSN Code: 9406

Prefabricated furniture, which includes modular systems and ready-to-assemble furniture, attracts a 28% GST rate. Falling under HSN Code 9406 , this type of furniture is generally more expensive, and the higher GST rate adds to the overall cost.

HSN (Harmonized System of Nomenclature) codes are crucial for identifying the exact type of product and determining the applicable GST rate. Correctly using HSN codes ensures that businesses follow tax regulations accurately and prevents overpaying or under-reporting taxes.For example, mattresses and cushions have a different GST rate (12%) compared to metal furniture (18%), and knowing the correct HSN code allows businesses to avoid mistakes in tax filings. Also Read: GST Impact on Indian Economy

With GST impacting the final price, you might find yourself weighing the choice between spending on high-quality, luxury pieces or sticking to more budget-friendly options. The different GST rates on various types of furniture can definitely influence your buying decisions and even shape what’s trending in the market.It’s all about finding that balance between what you want and what works for your budget!

Cost Increase Due to Higher GST Rates

The 28% GST on high-end furniture like prefabricated units and certain luxury items increases the cost of production, which ultimately affects the retail price. Furniture manufacturers and retailers often pass on the higher tax burden to consumers.

Lower GST on Mattresses and Bedding

Since bedding products, including mattresses and cushions, attract a 12% GST, they are relatively more affordable compared to other furniture items. This lower tax rate benefits consumers who need these essential home furnishings.

Impact on Demand

As furniture prices increase due to higher GST rates, consumer demand for non-essential items might reduce. High GST rates can have a dampening effect on the sales of luxury furniture, with buyers opting for more budget-friendly options.

When shopping for furniture or running a business in the furniture industry, understanding the applicable GST rates and HSN codes is crucial. Here's a quick overview of the different types of furniture, their HSN codes, and the GST rates that apply to them.

As GST rates change, you’ll need to adjust your production and pricing strategies. Higher taxes on luxury and modular furniture can drive up production costs, which might eat into your profits. You must decide whether to absorb these costs or pass them on to your customers, all the while monitoring the demand for more affordable options.Here's how GST impacts furniture manufacturers:

Increased Production Costs

Higher GST rates on certain categories of furniture, especially on luxury and modular items, lead to increased production costs for manufacturers. For instance, prefabricated furniture attracts a 28% GST, which adds to the cost of manufacturing and affects the profit margin.

Pricing Strategies

Furniture manufacturers may need to adjust their pricing strategies to account for GST changes. With the rise in the overall cost due to higher taxes, businesses must decide whether to absorb the additional costs or pass them on to the consumers.

Market Dynamics and Demand

The demand for furniture is often influenced by its price. As GST rates increase on specific furniture categories, consumers may shift their preferences to lower-taxed or budget-friendly items, such as bedding or plastic furniture, which are taxed at 12% or 18% .

Calculating GST on furniture is relatively straightforward. Here’s how you can easily determine the GST amount: Formula:

• GST Amount = (Cost of Furniture * GST Rate) / 100

Example:

• Let’s say you’re buying a wooden table costing ₹20,000. Since it falls under HSN Code 9403 for wooden furniture, the GST rate is 18%.

GST Amount:

• GST = (20,000 * 18) / 100 = ₹3,600
• Total Price = ₹20,000 + ₹3,600 = ₹23,600

By understanding this simple calculation, you can better manage your furniture expenses.

Now that you have a clearer understanding of the GST rates on different types of furniture, it's important to use this knowledge when making your next furniture purchase. Whether you’re looking to buy budget-friendly options or splurge on luxury items, being aware of the applicable GST rates can help you make informed decisions.If you're a consumer, monitor the impact of taxes on the final price, and if you're a business, remember to incorporate these costs into your pricing strategy. Ultimately, understanding these rates ensures that you're not only saving money but also choosing the right products that align with your needs and budget. Also Read: Understanding the Impact of GST on Health Insurance: Changes in Rates and Policies