Paddy HSN Code: Understanding the Classification of Paddy and Rice
Paddy is the raw form of rice that still has its husk. In GST it is treated as an important food grain. Correct use of the paddy HSN code helps farmers, millers and traders show their sales and purchases in a proper way.
Paddy and rice are covered in Chapter 10 of the Customs Tariff. The main heading is 1006 which includes paddy in husk, husked rice and milled rice meant for human use.
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Paddy HSN Code Classification and GST Rates
Here are some commonly used HSN codes and GST rates for this category
| Section | |
|---|---|
| Section No | 2 |
| Section Title | Guide to HSN Section 02 |
| Section Description | VEGETABLE PRODUCTS |
| Chapter | |
|---|---|
| Chapter No | 10 |
| Chapter Title | Cereals |
| Chapter Description | Cereals |
4 Digit HSN Code Classification
| HSN Code | HSN Code Title | GST Rate |
|---|---|---|
| 1006 | Rice | 5% |
8 Digit HSN Code Classification
| HSN Code | HSN Code Title | GST Rate |
|---|---|---|
| 10061010 | Rice in husk (paddy): Seed quality | 0% |
| 10061090 | Other Paddy (Non-Packaged) | 0% |
| 10062000 | Husked (brown) rice | 0% |
| 10063010 | Parboiled Rice (Excluding Pre-Packaged) | 0% |
| 10063020 | Basmati Rice (Excluding Pre-Packaged) | 0% |
| 10063090 | Non-Prepackaged/Labelled Other Rice | 0% |
| 10064000 | Broken rice | 0% |
* GST rates may vary based on the latest GST notifications
Classification of Rice Paddy under HSN Code
Under heading 1006, paddy in husk and rice after milling are classified based on how much processing is done. If the grain still has its husk and is only cleaned and dried, it is treated as paddy. Once the husk is removed and the grain is polished, it is shown as rice.
Farmers and mandi traders normally sell paddy under the same heading while rice mills record purchases of paddy and sales of rice separately. This clear use of HSN makes stock and tax records easy to understand.
GST Implications for Paddy Farming and Cultivation
Most direct supplies of paddy by farmers are exempt from GST when conditions in the law are met. This reduces the compliance burden on small farmers and keeps grain prices stable for consumers.
Rice sold in consumer packs with a brand name can attract GST if it falls under notified conditions. Unbranded or loose rice for household use may get full or partial relief. The HSN stays the same but the tax rate can depend on packing and branding.
The Role of HSN Code in Taxation for Paddy and Rice Products
Correct paddy HSN code helps you show values properly in GSTR 1 and GSTR 3B, in e way bills and in export or purchase reports. When paddy and rice are mapped to heading 1006 in a consistent manner, it becomes easier to answer any query from the department.
Rice mills and grain traders should update their billing software so that every item of paddy and rice carries the correct HSN. This avoids interest and penalty that can arise from wrong classification.
