Fertilizer HSN Code

Understanding Fertilizer HSN Codes

Fertilizers are the lifeblood of agriculture, playing a crucial role in enhancing crop yield and ensuring food security. For businesses involved in the manufacturing, distribution, or sale of fertilizers in India, a clear understanding of their Harmonized System of Nomenclature (HSN) codes and the applicable Goods and Services Tax (GST) rates is absolutely essential for compliance and smooth operations.

The HSN classification system provides a globally recognized method for categorizing goods. When it comes to fertilizers, the system is designed to differentiate between various types based on their chemical composition and intended use.

The Fertilizer HSN Codes

All types of fertilizers, whether mineral, chemical, or mixed, primarily fall under Chapter 31: Fertilizers of the HSN. This chapter is specifically dedicated to these vital agricultural inputs.

Within Chapter 31, the HSN codes for fertilizers are detailed further based on their primary fertilizing elements:

• HSN 3102: Nitrogenous Fertilizers
  • This heading covers mineral or chemical nitrogenous fertilizers. Key examples include:
    • 31021000: Urea, whether or not in aqueous solution. This is one of the most widely used nitrogen fertilizers.
    • 31026000: Double salts and mixtures of calcium nitrate and ammonium nitrate.
    • 31028000: Mixtures of urea and ammonium nitrate in aqueous or ammoniacal solution.
    • 31022990: Other ammonium sulphate; double salts and mixtures of ammonium sulphate and ammonium nitrate.
• HSN 3103: Phosphatic Fertilizers
  • This heading covers mineral or chemical phosphatic fertilizers, such as:
    • 31032000: Basic slag.
    • Other phosphatic fertilizers are generally classified here.
• HSN 3104: Potassic Fertilizers
  • This heading includes mineral or chemical potassic fertilizers, with a prominent example being:
    • 31042000: Potassium Chloride (Muriate of Potash or MOP).
• HSN 3105: Fertilizers Containing Two or Three Elements (NPK, DAP, MAP, etc.) and Other Fertilizers
  • This is a crucial heading for complex and mixed fertilizers:
    • 31052000: Mineral or chemical fertilisers containing the three fertilising elements nitrogen, phosphorus and potassium (NPK).
    • 31053000: Diammonium hydrogenorthophosphate (“diammonium phosphate” or DAP).
    • 31056000: Mineral or chemical fertilisers containing the two fertilising elements phosphorus and potassium.
    • 31059010: Mineral or chemical fertilisers containing two fertilising elements namely nitrogen and potassium.
    • This also includes “Other fertilisers” not covered elsewhere in the chapter, and goods of this chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg, provided they are clearly intended for use as fertilizers.

It is critical to note that if a product falling under Chapter 31 is clearly not to be used as a fertilizer, its GST rate might differ, typically attracting an 18% rate. However, for actual fertilizers used in agriculture, a concessional rate applies.

Understanding the GST Rate for Fertilizers

The Indian government has recognized the importance of fertilizers for the agricultural sector and has maintained a concessional GST rate to keep them affordable for farmers.

Most mineral or chemical fertilizers, including urea, DAP, MOP, and NPK, when they are clearly intended for use as fertilizers, attract a GST rate of 5%. This rate has been effective since July 1, 2017.

However, as highlighted in the data, if certain goods that technically fall under Chapter 31 are not clearly intended to be used as fertilizers (e.g., packaged in very small quantities or specific forms suggesting other uses), they may be subject to an 18% GST rate. There’s also an entry for “Fertilizer Grade Phosphoric Acid” (HSN 2809) with a 5% GST, showing that some related chemical inputs for fertilizers also benefit from concessional rates.

Furthermore, “Manure Spreaders And Fertilizer Distributors” (HSN 84324000), which are agricultural machinery, have a different GST rate of 12%, as they fall under Chapter 84 (Machinery) and not Chapter 31 (Fertilizers). This emphasizes the distinction between the fertilizer product and the machinery used to apply it.