Ghee HSN Code for GST Filing
Ghee is an important dairy product in Indian households, sweet shops and food businesses. Understanding the correct ghee HSN code and GST rate helps manufacturers, traders and retailers raise compliant invoices and avoid confusion during GST assessment.
What is the HSN Code for Desi Ghee and Cow Ghee?
Under GST, ghee is treated as a dairy fat and is classified in chapter 04 which covers milk and milk products. Both desi ghee and cow ghee are typically grouped under heading 0405 which covers butter and other fats and oils derived from milk, including ghee in packed and loose form.
| HSN Code | Product name | Product description | GST rate |
|---|---|---|---|
| 0405 | Desi ghee | Clarified butter obtained from milk fat in loose or packed form | 5% |
| 0405 | Cow ghee | Clarified butter made specifically from cow milk fat sold in retail packs or bulk | 5% |
| 0405 | Ghee for industrial use | Ghee used by sweet manufacturers and food processors as an ingredient | 5% |
Ghee earlier attracted a higher GST rate but under the revised rate structure the standard rate for ghee under heading 0405 is 5% subject to conditions notified by the government. Businesses should still track any special notification that may prescribe a different rate for specific product categories.
How Does the GST Rate Apply to Different Types of Ghee?
The GST rate for ghee is usually the same for desi ghee and cow ghee when they fall under heading 0405. The rate generally does not change only because the ghee is used for household consumption or in sweets manufacturing. However, the way ghee is packed and branded can decide whether it falls under normal retail supply or some special exemption category.
If ghee is sold in loose form to unregistered consumers it is still normally taxable at the standard rate. You should always verify if any local exemption or concessional rate exists for supplies under specific government schemes before changing the standard rate in your billing system.
Why Are Desi Ghee and Cow Ghee Classified Under Different HSN Codes?
In most cases both desi ghee and cow ghee fall under heading 0405 and do not require separate HSN codes. The difference is usually highlighted only in the product description on the invoice and packing, not in the HSN code itself.
Separate classification may come into question only where a product is specially processed or mixed with other ingredients such as flavoured ghee or fortified ghee. In such cases you should check whether the product still falls under the same heading or moves to a different chapter due to its changed character.
How to Classify Ghee Correctly for GST Returns?
For regular ghee items you should maintain clear item masters with description like desi ghee, cow ghee or industrial ghee and map them to heading 0405 with the standard GST rate. This ensures that every sale invoice, e way bill and e invoice carries the correct ghee HSN code.
While filing GSTR one you should report outward supplies of ghee under the correct HSN code with taxable value and tax amount. Matching of this data with buyers GSTR two and GSTR two B helps in smooth input tax credit flow.
Conclusion
Ghee is generally classified under heading 0405 and attracts 5% GST under the revised slab structure, unless a specific notification prescribes a different rate. Accurate use of ghee HSN code on invoices and returns keeps your tax position clear and reduces the chances of dispute.
Food businesses, super markets and dairies should keep their product masters updated so that every supply of ghee is reported correctly in GST records.
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 HSN code for ghee?
Ghee generally falls under chapter 04 and heading 0405 which covers butter and other fats and oils derived from milk. Both desi ghee and cow ghee are usually classified under this heading for GST purposes.
-
How is the GST rate applied to desi ghee and cow ghee?
Desi ghee and cow ghee falling under heading 0405 usually attract 5% GST under the revised rate structure. The rate is normally the same for both types unless a special notification specifies a different rate.
-
Does the HSN code vary for ghee based on its source?
Ghee derived from cow milk or buffalo milk is usually classified under the same heading 0405. The difference in source is reflected in the product description rather than in separate HSN codes.
-
How do I file ghee HSN code correctly for GST returns?
You should configure your billing and accounting software to use HSN 0405 for ghee items and apply the standard GST rate. While filing GSTR one, outward supplies of ghee should be summarised under this HSN with proper taxable value.
-
Are there separate HSN codes for different forms of ghee?
Plain ghee in liquid or semi solid form usually shares the same heading 0405. If ghee is blended with other ingredients or presented as a specialised product, you should recheck the classification before finalising the HSN code.