Latest GST furniture rates in 2024

The Goods and Services Tax (GST) tax system began operating on July 1, 2017, and is governed by the GST Council of India. It introduces a significant amount of change to the indirect tax structure. This central tax is charged on almost all items and services in the nation including furniture, with a few notable exceptions.

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GST rates for different types of furniture materials

Every category of furniture material is associated with a specific Goods and Services Tax (GST) rate, significantly impacting the economic aspect of our households. Let’s delve into the particulars of these rates and examine their effects on the pricing and accessibility of the furniture we introduce to our living areas. Below is a table presenting the GST rates for various types of furniture materials:

Furniture Material	GST Rate	Popular Options	Advantages	GST Impact
Wood	12% (28% for plywood)	Solid wood (mahogany, oak, teak), Engineered wood (MDF, plywood), Bamboo	Durability, natural beauty, eco-friendly options, classic appeal	Generally attracts lower GST (but plywood taxed at 28%)
Plastic	12% (may vary)	Polyethylene, Polypropylene, PVC	Lightweight, affordability, low maintenance, variety of styles and colours	Generally falls under standard 12% GST; May vary based on plastic-type and upholstery
Metal	18%	steel, aluminium, Iron, wrought iron	Durability, Industrial style, weatherproof, lightweight	Budget-friendly depending on design, Higher GST rate than wood;
Glass	28%	Safety glass, Tempered glass, frosted glass	Space-enhancing, Modern look and used for shelves, tables, accents, etc	Highest GST rate among common materials
Upholstery	18% (unless base material has already been classified as upholstered)	Leather, fabric, synthetic leather	Style, comfort, personalisation	Adds 18% GST if the base material isn’t already classified as upholstered

Wooden furniture GST rate applicable

If you are in the business of producing furniture, you will be required to pay GST on an individual basis for each material that you acquire. Under the Goods and Services Tax (GST) system, the relevant tax rate for completed wooden furniture is 12%. Plywood is often used in the construction of wooden furniture. When it comes to plywood, the GST, which is now in effect, is 28%, which is far more than the previous VAT rate of 5 or 6%. The high cost of the GST on plywood has resulted in an increase in the price of wooden furniture. Companies that produce furniture out of wood may claim an input tax credit (ITC) on the GST paid for plywood.

Particulars	GST on Furniture	VAT
Wood in the form of chips, sawdust, and wood waste	5%	Average 4-5%
Wooden furnishings and ornaments, including tableware and kitchenware	12%	Average 12.5%
Wood pulp and bamboo pulp	12%	Average 4-5%
Wood used to manufacture umbrellas, walking sticks, wooden boxes, drums, and tool handles, among other related products.	12%	Average 4-5%
Residual lyes from wood pulp production; chemically treated wood, containing lignin sulfonates (excluding tall oil)	18%	Average 4-5%
Wood tar, vegetable pitch, wood naphtha, brewers’ pitch, wood tar oils; wood preparations derived from resin, resin acids, or vegetable pitch and wood creosote.	18%	Average 4-5%
Fiber wood, plywood, and laminated wood, as well as materials that resemble wood or are woody in character.	28%	Plywood 5-6% Others Average 12.5%
Cane furniture	28 %	Average 4-5%
Wood charcoal or firewood	Exempt	Exempt

After applying these rates, you will be able to establish the prices of your items in accordance with the requirements imposed by the government. Keep a close check on the claims that are legally permissible for you to submit.

Iron and steel furniture manufacturer

Under GST, except wooden furniture, all other types of furniture are subject to a 28% tax. In contrast to the ordinary VAT rate of 5%, iron and steel will be subject to an 18% GST, regardless of the iron or steel’s characteristics. ITC is provided to producers at the rate of 18% of iron or steel imported under GST.

Example

A bought a steel almirah from XYZ furniture for Rs 50,000. A substantial division of XYZ furniture is dedicated to creating iron and steel furniture exclusively. XYZ had acquired and used steel worth Rs 30,000 for the furniture construction.

Taxable status:

VAT

Particulars	Amount
Applicable VAT on the Table (X)	Rs 6,250 (12.5% of Rs 50,000)
Available ITC on raw materials (Y)	Rs 1,250 (5% of Rs 25,000)
Total Tax Liability (X-Y)	Rs 5,000

GST

Particulars	Amount
Applicable GST on the table (X)	Rs 14,000 (28% of Rs 50,000)
Available ITC on raw materials (Y)	Rs 4,500 (18% of Rs 25,000)
Total tax liability (X-Y)	Rs 9,500

Effect of GST on furniture industry

When compared to the VAT tax rates, the tax rate on wood, iron, and steel under the GST is much greater. The price of the furniture that is constructed using these materials has gone up as a direct result. When compared to the tax burden associated with the production of wood, the tax liability associated with the production of steel and iron is substantially larger. It is safe to argue that makers of wooden furniture gain more under the Goods and Services Tax (GST) system than manufacturers of iron and steel furniture do.

FAQs

How does GST impact the affordability of furniture?

GST directly affects the cost of furniture. Knowing the applicable rates helps consumers choose materials that align with their budget and preferences.

Why is it important to know GST rates on furniture?

Understanding GST rates on furniture is crucial for budget planning, making informed purchasing decisions, and ensuring compliance with tax regulations.

Is GST applicable to both online and offline furniture purchases?

Yes, GST is applicable to both online and offline furniture transactions. The same tax rules apply regardless of the purchasing platform.

What are the different GST rates for furniture materials?

GST rates vary for different materials. For example, wood attracts 12%, metal is at 18%, plastic generally at 12%, upholstery at 18%, and glass at 28%.

Does GST vary for customised furniture?

No, GST rates for customised furniture are the same as for ready-made furniture. The rates are determined by the material used and its classification.

What is GST?

GST, or Goods and Services Tax, is a unified indirect tax introduced in India in 2017, replacing various pre-existing taxes. It applies to the supply of goods and services across the country.