GST Rate on Bio Fertilizers and Organic Manure Explained
The Rajasthan AAR ruled that bio-fertilizers sold unbranded attract no GST, but branded sales in unit containers attract 5% GST.
- Ruling
- ADVANCE RULING NO.RAJ/AAR/2018-19/04 Dated 16.06.2018
- Dated
- 16 Jun 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Rhizo Organic asked about GST rates for bio-fertilizers and organic manure.
- Bio-fertilizers fall under HSN code 3101 as organic fertilizers.
- Unbranded bio-fertilizers without unit packaging attract zero GST.
- Bio-fertilizers sold in unit containers with a brand name attract 5% GST.
In short
Rhizo Organic, a manufacturer based in Rajasthan, asked the tax authority how bio-fertilizers and organic manure should be taxed under GST. They wanted to know the correct HSN code classification and whether their products were exempt from tax or subject to a specific GST rate based on packaging and branding.
What has changed
How it worked before
Before this ruling, manufacturers were unsure whether living micro-organism fertilizers qualified under HSN code 3101. Many businesses assumed all organic manure was completely exempt from GST regardless of how it was packed or branded.
What has changed
The Authority for Advance Ruling clarified that bio-fertilizers and organic manure fall under HSN code 3101. If sold unbranded and without unit packaging, they are exempt from GST (0%). However, if sold in unit containers carrying a brand name, they attract 5% GST.
Who this affects
Manufacturers, traders, and agricultural suppliers across India who produce or sell bio-fertilizers, compost, or organic manure in bulk or packaged form.
An example
GreenSoil Organics manufactures organic manure in Rajasthan and wants to know what GST rate applies to its sales. If they sell loose manure in bulk plain sacks directly to farmers without a brand name, they charge 0% GST. However, if they pack the same manure in 5 kg bags printed with their brand name, they must charge 5% GST. This ruling shows how packaging and branding alter tax liability for the exact same product.
What you should do
Check how your bio-fertilizer products are sold. If you pack them in unit containers with a brand name, collect and deposit 5% GST; if sold loose and unbranded, do not charge GST. Note that an advance ruling binds only the business that applied for it, so your tax officer might disagree unless you obtain your own ruling.
If you do nothing
If you sell branded bio-fertilizers without paying 5% GST under the assumption that all organic manure is tax-free, tax officers can demand unpaid tax along with interest and penalties. Relying on another business's advance ruling will not protect you during an audit because rulings apply legally only to the original applicant. You could face unexpected tax demands that reduce your profits.
The terms explained
- HSN Code
- A standard international numbering system used under GST to classify goods and determine their tax rates.
- Unit Container
- A container designed to hold a fixed quantity or weight of a product for retail sale, such as a bottle, bag, or box.
- Advance Ruling
- An official decision by tax authorities answering a specific business's question about how GST law applies to them.
- NIL Rate
- A GST rate of zero percent where no tax is charged on the sale of goods.
The ruling in detail
Authority for Advance Ruling
RHIZO ORGANIC
ADVANCE RULING NO.RAJ/AAR/2018-19/04 Dated 16.06.2018 · Rajasthan
Questions before the authority
- Whether goods (Bio Fertilizer or Organic Manure) are Exempt from GST or Not?
Facts
The applicant is engaged in the manufacturing of bio-fertilizers and organic manure. They sought an advance ruling to clarify the classification of bio-fertilizers under HSN Code 3101 and the applicable GST rate.
Ruling
| Question | What the authority ruled |
|---|---|
| Bio Fertilizer or Organic Manure | NIL rate if unbranded/not in unit container; 5% GST if in unit container with brand name Classified under HSN Code 3101 |
The Authority ruled that bio-fertilizers or organic manure are **exempt (NIL rate)** if not put up in unit containers bearing a brand name. However, if put up in unit containers and bearing a brand name, they are taxable under GST at **5%**.
Reasoning
The Authority observed that bio-fertilizers consist of living micro-organisms (classified as animal origin) and fall under HSN Code 3101 covering animal or vegetable fertilizers. Under the GST rate notifications, HSN Code 3101 provides a NIL rate for goods other than those put up in unit containers bearing a registered brand name or brand name with actionable rights. Goods put up in unit containers bearing a brand name fall under the 5% GST tax bracket (2.5% CGST + 2.5% SGST).
Provisions relied on
- HSN Code 3101
- Section 97(2)(a) of the CGST Act, 2017
- Fertilizer (Control) Order, 1985
For the practitioner
This ruling establishes that bio-fertilizers qualify as animal or vegetable fertilizers under HSN Code 3101. Applicability of GST depends on **unit packaging and brand name**: unbranded bulk supplies attract NIL rate, whereas branded unit-container sales attract **5% GST**.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/raj.04.2018-19_dtd_16.06.18-ro.pdf
Legibility of the scan, as read: high.
Prepared 19-10-2026.
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