Methanol HSN Code

Methanol’s HSN Code: A Guide for Businesses

Methanol, also known as methyl alcohol, is a fundamental organic chemical with widespread industrial applications, ranging from fuels and solvents to the production of various chemical derivatives. For businesses dealing with methanol in India, correctly identifying its Harmonized System of Nomenclature (HSN) code and understanding the applicable Goods and Services Tax (GST) rate is crucial for seamless import, export, and domestic trade.

The Methanol’s HSN Code

Methanol’s classification in the HSN system is quite specific and falls under Chapter 29: “Organic chemicals.” This chapter is dedicated to individual organic chemical compounds of known chemical structure.

Within Chapter 29, methanol is precisely identified under:

• HSN Code 29051100: This code specifically describes “Acyclic Alcohols And Their Halogenated, Sulphonated, Nitrated Or Nitrosated Derivatives – Saturated Monohydric Alcohols : Methanol (Methyl Alcohol).”

This detailed breakdown ensures that methanol is distinct from other types of alcohols or organic chemicals, facilitating clear and consistent trade practices globally.

The GST Rate for Methanol

Based on the provided data, methanol is subject to a clear GST rate:

• GST Rate: 18%

This rate became effective from July 1, 2017, the inception date of GST in India. This consistent rate helps in predicting costs and ensuring accurate tax calculations for businesses involved in the methanol supply chain.

Why HSN Code Accuracy Matters

Accurate HSN code classification for methanol is vital for several reasons:

• GST Compliance: It directly impacts the GST amount to be charged and paid, ensuring compliance with Indian tax laws.
• Customs Clearance: For international trade, the correct HSN code facilitates smooth customs clearance, preventing delays and potential penalties.
• Trade Statistics: Accurate classification contributes to reliable national and international trade statistics, aiding economic analysis and policy-making.
• Avoidance of Disputes: Proper HSN declaration minimizes disputes with tax authorities or trading partners regarding product classification and applicable duties.

In essence, whether you are importing methanol for manufacturing, supplying it as a solvent, or using it as a fuel component, knowing its precise HSN code and GST rate is a fundamental requirement for efficient and compliant business operations. Always refer to the latest official notifications from the Central Board of Indirect Taxes and Customs (CBIC) for any updates or changes in classifications and rates.