Vermicompost New GST Rate in India
As organic farming and eco-friendly practices gain popularity, vermicompost—a natural fertilizer made from worm digestion—has become a staple for farmers, gardeners, and environmentalists alike. But is GST applicable to this green product? This guide explains the vermicompost GST rate in India, and how it’s treated under agricultural and compost-related taxation.
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New GST Rate on Vermicompost & Compost/Fertilisers in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for vermicompost, compost and related fertiliser items (no compensation cess).
| Product Type | GST Status |
|---|---|
| Vermicompost (organic) | Exempt (0%) |
| Organic manure | Exempt (0%) |
| Bio-fertilisers | Exempt (0%) |
| Branded / commercial compost | 5% |
New GST Rate on Vermicompost vs Other Compost Products
| Compost/Fertiliser Type | New GST Rate | Remarks |
|---|---|---|
| Vermicompost | 0% (Exempt) | Classified as organic manure |
| City compost (govt-approved) | 5% | Promoted under public sanitation & waste-to-compost schemes |
| Urea (chemical fertiliser) | 5% | Subsidised fertiliser |
| NPK / DAP (blended fertilisers) | 5% | 12% slab discontinued; aligned to 5% |
What is Vermicompost?
Vermicompost is an organic fertilizer made by decomposing biodegradable waste using earthworms. It’s commonly used in:
- Organic farming
- Gardening and landscaping
- Soil conditioning
- Horticulture and agroforestry
Due to its natural and chemical-free nature, it’s classified under agricultural inputs in the GST law.
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Old GST on Vermicompost: Exempt or Taxable?
(Old GST Rates – Applicable Until 21st September)
| Product Type | GST Status |
|---|---|
| Vermicompost (organic) | Exempt |
| Organic manure | Exempt |
| Bio-fertilizers | Exempt |
| Branded/commercial compost | 5%–12% |
Old GST Rate on Vermicompost vs Other Compost Products
| Compost/Fertilizer Type | GST Rate | Remarks |
|---|---|---|
| Vermicompost | 0% (Exempt) | Classified as organic manure |
| City compost (govt-approved) | 5% | Promoted under Swachh Bharat mission |
| Urea (chemical fertilizer) | 5% | Subsidized chemical fertilizer |
| NPK / DAP (blended fertilizers) | 5%–12% | Based on composition |
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Who Benefits from GST Exemption?
- ✅ Farmers and agricultural cooperatives
- ✅ Organic farming supply stores
- ✅ Gardening supply businesses
- ✅ NGOs working in sustainable agriculture
- ✅ Home composting solution providers
GST Compliance Tips for Compost Sellers
- No GST registration required if you deal only in exempt items like vermicompost
- If your business sells both exempt and taxable goods, maintain separate accounts
- Clearly label the product as “organic manure/vermicompost” on invoices
- Use the correct HSN Code 3101 for organic fertilizers
Understanding the vermicompost GST rate in India ensures that eco-conscious suppliers and buyers remain compliant while promoting sustainable agriculture practices.
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
-
What is the GST on vermicompost in India?0% GST. Vermicompost is exempt as it's classified as an organic manure.
-
Is GST applicable on organic fertilizers?No. Organic fertilizers, including vermicompost and bio-compost, are exempt from GST.
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What if I brand and package vermicompost?As long as it's classified under organic manure, it remains exempt. However, if treated or rebranded as a chemical enhancer, GST may apply.
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What is the GST rate on vermicompost for farming purposes?Still 0%, as farming and agricultural inputs benefit from GST exemptions.
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Do compost sellers need GST registration?Only if they deal in both taxable and exempt items or if their total turnover crosses the registration threshold.
