Agarbatti New GST Rate: Tax on Incense Sticks and Fragrance Products
Agarbatti, or incense sticks, hold a special place in Indian homes, temples, and ceremonies. They’re not just religious items but also used for meditation, aromatherapy, and gifting. But how are these fragrant products taxed under GST (Goods and Services Tax) ? Let’s explore the agarbatti gst rate, how it has changed, and what it means for sellers and buyers.
New GST Rate on Agarbatti & Inputs in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for agarbatti products and common inputs (no compensation cess).
| Product | HSN Code | New GST Rate |
|---|---|---|
| Agarbatti (Incense sticks) | 3307 | 5% |
| Dhoop sticks/cones (non-branded) | 3307 | 5% |
| Branded dhoop sticks/cones | 3307 | 5% |
| Scented candles, aroma oils | 3307 / 3406 | 5% or 18% |
Raw Materials New GST Rates Used in Agarbatti
| Raw Material | New GST Rate |
|---|---|
| Bamboo sticks | 5% |
| Fragrance oils | 18% |
| Resin (Guggul, Loban) | 5% |
| Binding powders | 5% |
Old GST on Agarbatti: The Basics
(Old GST Rates – Applicable Until 21st September)
Under GST regime , agarbattis are considered household consumption products. Originally, they were kept under a lower tax bracket to support small-scale cottage industries.
| Product | HSN Code | GST Rate |
|---|---|---|
| Agarbatti (Incense sticks) | 3307 | 5% |
| Dhoop sticks/cones (non-branded) | 3307 | 5% |
| Branded dhoop sticks/cones | 3307 | 12% |
| Scented candles, aroma oils | 3307 / 3406 | 12%–18% |
GST on Dhoop Agarbatti and Cones
Dhoop sticks and cones are similar to agarbattis but often come without wooden sticks. They’re thicker and burned for stronger aroma in rituals.
- Unbranded dhoop = 5%
- Branded or packaged dhoop = 12%
Raw Materials Used in Agarbatti
Most raw materials used in manufacturing agarbatti also attract GST:
| Raw Material | GST Rate |
|---|---|
| Bamboo sticks | 12% |
| Fragrance oils | 18% |
| Resin (Guggul, Loban) | 5%–12% |
| Binding powders | 5% |
Manufacturers can claim Input Tax Credit on these inputs when they sell the final taxable product.
GST Impact on Small Agarbatti Units
- 5% GST made raw materials slightly costlier
- Units with turnover below ₹40 lakh can skip GST registration
- Larger units must register and charge GST on sales
Packaging and Branding: The Game Changer
GST rate changes depending on how the product is packaged and presented:
- Loose agarbattis: 5%
- Branded agarbattis in retail packs: 5%
- Premium packaged dhoop cones: 12%
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Conclusion
Understanding the agarbatti gst rate helps both manufacturers and customers know how these aromatic products are taxed. While the government has kept most incense items at a low 5% rate, value-added and branded variants fall into higher brackets.
I am a Fellow Chartered Accountant (FCA) and LLB graduate with 10 years of experience in corporate auditing, taxation, and financial consulting. My expertise includes corporate audits, income tax planning, HSN code classification, and GST rate advisory. Through my blogs and articles, I aim to simplify corporate taxation, auditing, and GST compliance, making financial matters more accessible for professionals and business owners.
Frequently Asked Questions
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What is the current agarbatti GST rate in India?The GST on agarbatti is 5% under HSN code 3307.
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Is GST applicable on dhoop sticks and cones?Yes. Unbranded dhoop = 5%, Branded dhoop = 12%.
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Are raw materials for agarbatti taxed under GST?Yes. Items like bamboo sticks and essential oils are taxed between 5% and 18%, depending on the material.
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Can agarbatti manufacturers claim Input Tax Credit?Yes, if they are registered and charge GST, they can claim ITC on inputs used.
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Are incense products sold in temples also taxable?Yes, unless exempted under religious trust supply rules. Normally, sale of incense is taxable at 5% or 12% based on type.