GST on Jaggery (Gur): Clarifying Rates & Exemptions
Jaggery, known as Gur in many parts of India, is a natural sweetener made from sugarcane or palm sap. It’s widely used in rural households and traditional recipes. While it’s considered a staple in many kitchens, the GST on jaggery can sometimes be confusing due to varying tax rules for its different forms—solid, powdered, packaged, or loose. This blog clears up the applicable GST rates, exemptions, and classification based on how jaggery is sold and used.
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Is GST Applicable on Jaggery?
Yes, GST is applicable on jaggery, but not in all cases. The tax rate depends on:
- Form: Solid vs Powder
- Packaging: Branded/Pre-packaged vs Loose
- Labeling: Whether it has a registered brand name
The good news is that most traditional or loose jaggery is exempt from GST.
GST Rate on Jaggery (Gur) and Jaggery Powder
| Type of Jaggery | GST Rate | Condition |
|---|---|---|
| Loose/Unbranded Jaggery (Solid) | 0% | No packaging, no branding |
| Pre-packaged/Labelled Jaggery | 5% | Packaged and labelled as per legal rules |
| Jaggery Powder (Loose) | 0% | No branding, not pre-packaged |
| Jaggery Powder (Packaged) | 5% | Packaged and labelled |
HSN Code for Jaggery
Jaggery is classified under HSN Code 1701, which covers cane or beet sugar and chemically pure sucrose in solid form.
| Product Description | HSN Code | GST Rate |
|---|---|---|
| Gur / Jaggery (Solid) | 1701 | 0% or 5% |
| Jaggery Powder | 1701 | 0% or 5% |
Input Tax Credit (ITC) on Jaggery
Since unbranded jaggery is exempt from GST, ITC cannot be claimed when used or sold in that form. However, if a business deals in packaged and taxable jaggery (5%), it can:
- Claim ITC on inputs such as packaging, transportation, and processing
- Maintain GST-compliant invoices and HSN codes for audit purposes
Impact on Farmers and Small-Scale Producers
Small jaggery producers who sell loose and unbranded jaggery benefit from the GST exemption. This reduces the compliance burden for rural and cottage industries. However, if they start branding or packaging their products for retail chains or supermarkets, they must:
- Register under GST (if turnover exceeds ₹40 lakh)
- Charge 5% GST on sales
- File regular GST returns
Conclusion
The GST on jaggery depends mainly on whether it’s branded and packaged. Loose or unbranded jaggery is GST-exempt, supporting traditional and small-scale producers. On the other hand, packaged jaggery is taxed at 5%, and businesses dealing with it must follow standard GST compliance rules. By knowing the correct rate and HSN code, both buyers and sellers can avoid confusion and ensure smooth transactions.
As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience.
Frequently Asked Questions (FAQs)
- What is the GST on jaggery in India?Unbranded and loose jaggery is exempt (0% GST), while packaged and branded jaggery attracts 5% GST.
- Is there GST on jaggery powder?The jaggery powder GST rate is 0% for loose, unbranded powder and 5% if it’s packaged and labelled.
- What HSN code is used for jaggery?1701 is the HSN code for both solid and powdered jaggery.
- Can ITC be claimed on jaggery purchases?ITC is allowed only for taxable (5%) jaggery, not for exempt (0%) sales.
- Are all types of gur treated the same under GST?Yes, whether it’s cane jaggery or palm jaggery, the GST on jaggery depends on branding and packaging.
