Every chemical invoiced in India carries an HSN code, and every chemical that crosses a border is classified under the Harmonized System. The code determines customs duty, GST rate, eligibility for export incentives and, sometimes, whether an import licence is needed. Misclassification leads to disputes, penalties and delays. This article explains how chemicals are classified, focusing on the distinction between Chapters 28 and 29, and summarises GST basics for Indian buyers. It is general guidance. Rates and rules change, so confirm with the current tariff and notifications or a tax adviser.
The Harmonized System and HSN
The Harmonized Commodity Description and Coding System, maintained by the World Customs Organization, classifies goods into 21 sections and 97 chapters. The first six digits are internationally harmonised. India extends these to eight digits for customs, the ITC-HS or tariff codes, and uses HSN codes for GST. Classification is governed by the General Rules for the Interpretation of the Harmonized System, the section and chapter notes, and the heading texts, read in that order of legal priority.
Chapter 28: inorganic chemicals
Chapter 28 covers inorganic chemicals, organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes. It includes:
- Chemical elements such as halogens, sulfur, phosphorus and certain metals (2801 to 2805)
- Inorganic acids and oxygen compounds of non-metals (2806 to 2811)
- Halides and sulfides of non-metals (2812 to 2813)
- Inorganic bases, metal oxides, hydroxides and peroxides (2814 to 2825)
- Salts and peroxysalts of inorganic acids and metals, such as chlorides, sulfates, nitrates, phosphates and carbonates (2826 to 2842)
- Compounds of precious metals, rare earths and isotopes (2843 to 2846), and miscellaneous items such as hydrogen peroxide (2847)
Note that isotopes and their compounds fall under heading 2845, and compounds of precious metals under 2843, even if they are organic.
Chapter 29: organic chemicals
Chapter 29 covers separate chemically defined organic compounds, organised by functional group:
- Hydrocarbons and their halogenated, sulfonated or nitrated derivatives (2901 to 2904)
- Alcohols, phenols, ethers, peroxides and epoxides (2905 to 2910)
- Aldehydes, ketones and quinones (2911 to 2914)
- Carboxylic acids and their derivatives (2915 to 2918)
- Esters of inorganic acids (2919 to 2920)
- Nitrogen-function compounds such as amines and amides (2921 to 2929)
- Organo-sulfur, organo-inorganic and heterocyclic compounds (2930 to 2934)
- Sulfonamides, vitamins, hormones, alkaloids, glycosides, antibiotics and sugars (2935 to 2941)
Where a compound has several functional groups, the chapter notes give an order of precedence: it is classified in the heading that occurs last in numerical order among those that could apply.
What separate chemically defined compound means
Both Chapters 28 and 29 cover, with exceptions, separate chemically defined compounds: single substances of defined composition, whether or not containing impurities. The chapter notes also allow such compounds dissolved in water, in other solvents where this is normal and needed for safety or transport, or with added stabilisers, anti-dusting agents or colouring for identification. Beyond these allowances, deliberate mixtures move to other chapters.
When a chemical leaves Chapters 28 and 29
| Situation | Likely chapter or heading |
|---|---|
| Medicaments in measured doses or packed for retail sale | Chapter 30 (3003, 3004) |
| Surface-active agents and detergent preparations | Chapter 34 (3402) |
| Diagnostic or laboratory reagents on a backing, prepared reagents and certified reference materials | Chapter 38 (3822) |
| Prepared binders, catalysts, mixed chemical preparations | Chapter 38 (for example 3815, 3824) |
| Polymers in primary forms, such as polyacrylamide | Chapter 39 |
| Essential oils and aroma mixtures | Chapter 33 |
There are also exceptions in the other direction: sodium chloride, even of analytical purity, is classified under heading 2501 in Chapter 25 rather than Chapter 28, while a prepared mixture of laboratory reagents may fall under 3822. APIs are classified in Chapter 29 as organic compounds, while the finished medicine is Chapter 30. Such exceptions are why classification should be checked for each product.
GST basics for chemical buyers in India
Rates
Most industrial and laboratory chemicals attract GST at the standard rate that applies to Chapters 28 and 29, historically 18%, while some items such as certain fertilisers, specified drugs and some inputs carry concessional rates. GST rates were restructured in 2025 into a simpler slab system, so check the current rate schedule notified by the government for each HSN code rather than relying on older lists.
HSN on invoices
GST tax invoices must show HSN codes. The number of digits required depends on the supplier's annual aggregate turnover: businesses above a specified threshold must use six digits, and smaller businesses four digits for business-to-business supplies. Using the full eight-digit code is always acceptable and avoids ambiguity.
Input tax credit
Registered buyers can generally claim input tax credit for GST paid on chemicals used in the course of business, subject to conditions such as holding a valid tax invoice, the supplier having filed returns, and the goods having been received. Provide your GSTIN and correct billing details when ordering so that the invoice supports your claim.
Imports and exports
Imports attract basic customs duty according to the eight-digit tariff code, plus integrated GST (IGST) on the assessable value including duty, along with any applicable cess or surcharge. Exports are zero-rated: exporters either supply under a Letter of Undertaking without paying IGST, or pay IGST and claim a refund.
Practical tips
- Classify each product individually, starting from its chemical identity and CAS number.
- Check chapter notes and exclusions, not just heading titles.
- Keep classification consistent across your purchase orders, invoices and shipping documents.
- For uncertain cases, consider an advance ruling or professional advice.
FAQs
Is an API classified under Chapter 29 or 30?
An API as a separate chemically defined organic compound is generally classified in Chapter 29. Medicaments in measured doses or retail packs fall under Chapter 30.
Which chapter covers laboratory reagents?
Pure single compounds usually stay in Chapters 28 or 29. Prepared laboratory reagents, reagents on a backing and certified reference materials generally fall under heading 3822.
How many HSN digits must appear on a GST invoice?
It depends on the supplier's turnover: four or six digits are mandatory depending on the threshold. Using the full eight-digit code is always acceptable.