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Published on:

February 24, 2025

Viraaj Vashishth

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GST Rates and HSN Code 4402 for Wood Charcoal

In India, taxation of goods is integrated within the framework of GST. One of the primary tasks in doing so, is classification of products using HSN codes which enables systematic classification of products for uniform taxation throughout every region of the country. One such example is wood charcoal which falls within the ambit of 4402 HSN code GST rate. Knowing this definition is crucial for companies that engage in the trade of charcoal products because it determines their tax obligations and compliance requirements.

Understanding HSN Code 4402

As for the previous section, the HSN code 4402 is associated with wooden products and falls under Chapter 44 of the HSN classification that deals with wood and products of wood. Specifically 4402 covers wood charcoal, including shell or nut charcoal agglomerated or not. This classification makes sure many different types of wood charcoal, raw or processed into briquettes or even pellets for that matter fall under this category for taxation purposes.

Different industries which include metallurgy, pharmaceuticals, and even cooking in the household setting utilize wood charcoal. Adequate classification under the charcoal HSN code ensures that manufacturers and trade are correctly taxed and are not subjected to legal or financial issues.

You Can Also Read: Plywood, Laminates, and Veneers HSN Code & GST Rate - 4412

GST Rate for HSN Code 4402

The GST rate applicable to 4402 HSN code is straightforward. According to the guidelines set by the GST Council, the amount of tax that applies to wood charcoal is 5%. This applies to all types of wood charcoal whether it is in lump form or whether it is processed into briquettes. The following table outlines the charge of charcoal GST pertaining to HSN code 4402.

HSN Code	Description	Rate (%)	CESS (%)
4402	Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated	0	0
44020010	Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated - Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated: Of Coconut Shell	0	0
44020090	Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated - Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated: Other	0	0
440210	Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated	0	0
44021000	Of Bamboo	0	0
44021010	Whether Or Not Agglomerated - Wood Charcoal (Including Shell Or Nut Charcoal)Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated - Of Bamboo	0	0
440290	Other	0	0
44029010	Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated - Other: Of Coconut Shell	0	0
44029090	Wood Charcoal (Including Shell Or Nut Charcoal), Whether Or Not Agglomerated: Other-Other	0	0

This classification is favorable for both small-scale manufacturers, who will be able to benefit from the reduced tax burden, and large-scale traders, who deal in fuel products that are skilled at much higher GST rates.

Importance of GST Rate for Wood Charcoal

1. Impact on Pricing and Trade

Taxation at a 5% rate allows wood charcoal to remain a cheaper source of energy. Charcoal is often used in rural households all over the world for cooking and heating. Therefore, a lower GST rate prevents excessive cost escalation.

2. Compliance for Businesses

For traders and businessmen dealing in wooden charcoal sheets and other charcoal related products, the knowledge about GST taxation on these products is also important for invoicing and tax filings within the boundaries of the law. Failure to do so can invite penalties with the tax authority.

3. Advantage for Exporters and MSMEs

In the financial structure for wood charcoal businesses, the HSN code classification 4402 has a comparatively low GST impact. This is helpful for small and medium enterprises (SME) involved in production and trading of wood charcoal. Moreover, exporters of products manufactured from charcoal are eligible for input tax credit (ITC), which mitigates their tax responsibility.

Variants Of Wood Charcoal Classified Under HSN Code 4402

Generally, HSN code 4402 contains different types of wood charcoal, such as:

1. Raw Wood Charcoal: It is a type of charcoal left over after wood has been burnt in a low oxygen setting.

2. Charcoal Briquettes: Charcoal range that is made from a dust variety of charcoal which is compressed into blocks for storage or reaching.

3. Activated Charcoal: Charcoal that is prepared for use in medicine or in industries and has the ability to absorb a lot.

4. Shell Or Nut Charcoal: Charcoal made out of coconut shells or the shells of other nuts but is usually reserved for high quality Industrial use.

What Is The Procedure For Applying HSN Code 4402 For GST Billing?

The businesses trading in wooden charcoal sheets or any other charcoal goods must capture the applicable HSN code while issuing the tax invoice. These businesses should:

1. Write HSN code 4402 on the invoice under product description.

2. Ensure application of the 5% GST tax exercise for regulatory compliance.

3. Keep documents in order for reclaiming input VAT if it is applicable.

Over or under classification or omission of the HSN code may result in penalties, tax audits, and disallowance of input tax credits.

Also Read: Wooden Furniture: 9403 HSN Code and GST Rate

Conclusion

The 4402 HSN code GST rate is an important factor in the taxation policy of wood charcoal in India. A single GST registration for five percentage 5% GST means low tax burden while ensuring compliance to taxation policies. It is prudent to classify charcoal products that are under HSN code products like briquettes, activated charcoal, and wooden charcoal sheets properly under HSN code 4402 to avoid resulting legal and financial penalties. Following these guidelines allows normal business operations and fulfills taxation compliance and sustains trade of wood charcoal in India. That is why many businesses focus on India charcoal HSN code.

FAQs

1. What is the GST rate for HSN code 4402?

High grade wood charcoal falls under 4402 HSN code hence the GST is 5%. It applies to all forms of charcoal lumps plus briquettes.

2. What is the classification of wood charcoal in the HSN system?

The wood charcoal category of charcoal includes both raw and processed charcoal as well as shell charcoal or nut charcoal, so it is classified under HSN code 4402.

3. Can activated charcoal be classified under HSN Code 4402?

That's not true. Activated charcoal has a different HSN code than regular charcoal, which falls under 4402.

4. Does the 5% GST rate apply to wooden charcoal sheets?

Wooden charcoal sheets are classified under HSN code 4402, therefore they attract 5% charcoal GST rate. That is correct.

5. Is it possible for businesses to claim an input tax credit on the 4402 HSN code GST Rate?

Yes. Registered businesses are able to claim an input tax credit on wood charcoal purchases under the 4402 HSN Code.

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