Agarbatti New GST Rate: Tax on Incense Sticks and Fragrance Products
- The GST rate for agarbatti and non-branded dhoop sticks is set at 5%, effective after September 22, 2025.
- Branded dhoop sticks and cones will continue to have a 5% GST rate, while scented candles and aromaoils have a rate of 5% or 18%.
- Raw materials like bamboo sticks, resin, and binding powders are taxed at 5%, but fragrance oils have an 18% GST rate.
- Previously, branded dhoop sticks had a 12% GST rate, and scented candles/aroma oils had a 12%–18% rate.
- Small agarbatti units with a turnover below ₹40 lakh can avoid GST registration, while larger ones must register and charge GST.
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.
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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% |
Product
HSN Code
New GST Rate
Product
HSN Code
New GST Rate
Product
HSN Code
New GST Rate
Product
HSN Code
New GST Rate
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% |
Raw Material
New GST Rate
Raw Material
New GST Rate
Raw Material
New GST Rate
Raw Material
New GST Rate
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% |
Product
HSN Code
GST Rate
Product
HSN Code
GST Rate
Product
HSN Code
GST Rate
Product
HSN Code
GST Rate
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% |
Raw Material
GST Rate
Raw Material
GST Rate
Raw Material
GST Rate
Raw Material
GST Rate
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.
