Furniture GST Rate in India 2025
Furniture is a necessity in every home and office. India's furniture sector makes a major economic contribution to the country. The taxation structure for furniture has evolved in India since the Goods and Services Tax (GST) was implemented in 2017.
Companies which manufacture furniture have to shell out a certain amount as tax as GST rates on the sale of their items. Earlier, a GST of 12.5% would be levied. However, now, a GST of 12% is levied.
GST Rates on Wooden Furniture
Given below in the table are the GST rates for different types of wooden items.
Items | GST rates | VAT applicable |
Items like drums, wooden crates and boxes. These items are used in making tool handles, walking sticks, umbrella, etc. | 12% | Around 4% - 5% |
Bamboo and wood pulp | 12% | Around 4% - 5% |
Residual products post the manufacturing of wood pulp, items such as lignin sulphonates excluding tall oil | 18% | Around 4% - 5% |
Timber naphtha, wood tar, timber tar oils, brewers' pitch, vegetable pitch, and compositions based on resin acids, resin, or a vegetable pitch and wooden creosote | 18% | Around 4% - 5% |
Wooden items used as a kitchenware or table ware | 12% | Around 12.5% |
Fibrewood, laminated wood, plywood, and similar materials having an appearance of wood or being woody | 28% | Around 5% - 6% for plywood, and 12.5% for other types of woods |
Wood charcoal or firewood | Exempted | Exempted |
Saw dust, wood in chips, waste wood | 5% | Around 4% - 5% |
Furniture made of cane | 28% | Around 4% - 5% |
The final goods produced will be taxed at 12% instead of the earlier 12.5%.
VAT related tax liability
For example, Suresh purchases a wooden sofa at a cost of Rs.30,000. The manufacturer had to pay Rs.10,000 for the wood, which was made of plywood. The tax liability under VAT is given below:
- Tax levied on the wooden sofa = Rs.3,750 (12.5% of Rs.30,000)
- ITC available purchase of plywood = Rs.600 (6% of Rs.10,000)
- Net tax liability = Rs.3,150 (Rs.3,750 – Rs.600)
GST related tax liability
If Suresh purchases a wooden sofa at a cost of Rs.30,000, where the manufacturer pays Rs.10,000 for the wood, made of plywood, then the tax liability under GST is given below:
- Tax levied on the wooden sofa = Rs.3,600 (12% of Rs.30,000)
- ITC available purchase of plywood = Rs.2,800 (28% of Rs.10,000)
- Net tax liability = Rs.800 (Rs.3,600 – Rs.2,800)
Impact of GST on Furniture Manufacturers
- Excise duty is now easy to calculate with GST.
- The cost of conducting business will be cheaper as GST is considered to be simple tax which helps in reducing various other indirect taxes. There will be no hidden taxes levied.
- GST will allow both state and central government to charge one single tax instead of charging 16 different taxes.
- Earlier the manufacturer had to shell out VAT and excise duty on their items. However, post the introduction of GST, now there will be only one tax calculated on the cost of the item. This will also help the item become cheaper and its sales grow too.
- Furniture makers and retailers now find it simpler to adhere to regulations due to the streamlined taxation structure, which lowers the cost of compliance for companies.
Conclusion
It is clear that tax liability under GST for wooden materials will be higher as compared to tax liability under VAT. However, there are other benefits of GST being charged such as elimination of various other indirect taxes, and conducting business becoming cheaper.
The furniture industry in India has benefited greatly from the lower tax rates and simpler tax structure brought about by the GST rate. However, the industry has encountered certain difficulties since the introduction of the Goods and Services Tax, which must be resolved to maintain the industry's seamless operation. All things considered, the GST system has helped the furniture business and made furniture cheaper for consumers.
FAQs on GST Rate on Furniture Manufacturers
- What is the GST rate for wooden furniture?
In India, the GST rate on wooden furniture is 18%.
- What is the GST rate for steel furniture?
A GST rate of 18% is levied on steel furniture.
- Does GST apply to furniture that is customised?
Yes, GST is applicable to both custom and ready-made furniture.
- What is the GST applicable on plastic furniture?
In India, the GST rate on plastic furniture is 12%.
- What is the GST rate for upholstered furniture?
In India, the GST rate on upholstered furniture is 18%.
- What is the effect of GST on India's furniture industry?
The implementation of GST has streamlined the tax structure for the furniture sector, resulting in reduced tax rates, thereby increasing furniture affordability for customers.
However, there are some issues associated with GST, including problems with classification and burdens related to compliance for small businesses.
- Is GST imposed on furniture exports from India?
No, because exports are regarded as zero-rated supplies under the GST regime, furniture exports from India are exempt from the GST.
- Are there any furniture-related GST exemptions?
Furniture is subject to GST in India; however, the classification of the item may result in a lower tax rate.
- Is GST levied on surgical or medical furniture?
Yes, furniture used in dentistry, surgery, medicine, or veterinary care, such as operating tables, hospital beds, and examination tables, is subject to 18% GST.
- Has GST helped in reducing the cost of manufacturing?
Since all the taxes paid earlier have been brought under one umbrella, which is the GST, this has helped the manufacturers as they do not require to pay any indirect tax. This has helped in reducing the cost of manufacturing.
- Can I claim GST on the purchase of furniture for office use?
Yes, you can claim GST on purchase of furniture purchased for office use.
- Can I claim GST on the materials purchased for construction?
No, you cannot claim GST on materials purchased for construction.
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