GST for Furniture Business 2026 – Rates, HSN Codes & Complete Compliance Guide

GST 2.0 rates on wooden, metal, plastic, glass, and bamboo furniture. Detailed HSN classification, ITC rules, registration process, and compliance for furniture manufacturers, traders, and showroom owners.

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Quick Summary – GST for Furniture Business

GST 2.0 Rates (effective 22 Sept 2025): Most finished furniture (wood, metal, plastic, glass, stone) – 18%; Bamboo/Cane/Rattan – 5% (reduced from 12%); Mattresses & Bedding – 18% (increased from 12%).
Registration Threshold: ₹40 lakh for traders/manufacturers (goods); ₹20 lakh for businesses with services (interior design, installation).
ITC: Available on raw materials, shop rent, electricity, advertising, and capital goods.
Composition Scheme: 1% GST for turnover up to ₹1.5 crore (no ITC, no inter‑state sales).
E‑Way Bill: Mandatory for movement of furniture exceeding ₹50,000.

Takeaway: Furniture businesses must update rate masters and HSN codes to stay compliant with GST 2.0.

1. Introduction – GST for Furniture Business in India

The furniture industry is one of India's largest and fastest‑growing sectors. It covers wooden, metal, plastic, glass, stone, and eco‑friendly bamboo/cane/rattan furniture, including modular kitchens and office furniture.

GST compliance is critical for manufacturers, traders, showroom owners, and interior designers. It affects pricing, margins, and competitiveness.

Under GST 2.0 (effective 22 September 2025), the earlier 12% and 28% slabs have been abolished. Most finished furniture now falls under a uniform 18% GST slab. However, bamboo, cane, and rattan furniture enjoy a reduced 5% GST.

This guide covers GST rates, HSN classification, registration, ITC, reverse charge, returns, e‑way bill, common mistakes, penalties, and industry‑specific insights.

Takeaway: Understand the new GST 2.0 rates and update your billing software immediately.

2. GST 2.0 Rate Structure for Furniture (2026)

The 56th GST Council meeting introduced GST 2.0 with only four tiers: 0%, 5%, 18%, and 40% (luxury/sin goods). Furniture items are primarily taxed at 5% or 18%.

Furniture Category	HSN Code	Old Rate	New Rate (2026)
Wooden Furniture (tables, beds, wardrobes)	9403	18%	18%
Metal Furniture (steel tables, chairs)	9403	18%	18%
Plastic Furniture	9403	18%	18%
Glass Furniture	9403	28%	18% (reduced)
Stone/Marble Furniture	9403	28%	18% (reduced)
Bamboo/Cane/Rattan Furniture	9403	12%	5% (reduced)
Mattresses & Bedding	9404	12%	18% (increased)
Seats & Chairs (sofas, stools, office chairs)	9401	18%	18%
Medical Furniture	9402	18%	18%

Example – Rate Update Required: A showroom selling glass‑top dining tables must now charge 18% GST instead of 28%. Bamboo chair sellers must reduce GST from 12% to 5%. Failing to update leads to incorrect tax collection and penalties.

Key Changes Under GST 2.0:

✅ Bamboo/Cane/Rattan: 12% → 5% (to promote eco‑friendly products)
✅ Glass & Stone Furniture: 28% → 18% (harmonised with other furniture)
⚠️ Mattresses & Bedding: 12% → 18% (standardised with furniture category)
✅ Wood, Metal, Plastic: remain at 18%

Takeaway: Update your ERP/POS rate masters before 1 April 2026 to reflect these changes.

3. HSN Code Classification for Furniture

HSN (Harmonised System of Nomenclature) codes determine the correct GST rate. Furniture falls mainly under Chapter 94.

HSN Code	Description	GST Rate
9401	Seats (chairs, sofas, stools) and parts	18%
9402	Medical, surgical, dental furniture	18%
9403	Other furniture (tables, beds, wardrobes, cabinets, modular units) and parts	18% (or 5% for bamboo)
9404	Mattresses, cushions, pillows, bedding	18%

Detailed HSN 9403 Sub‑codes

📌 940310 – Metal office furniture
📌 940320 – Other metal furniture
📌 940330 – Wooden office furniture
📌 940340 – Wooden kitchen furniture
📌 940350 – Wooden bedroom furniture
📌 940360 – Other wooden furniture
📌 940370 – Plastic furniture
📌 940380 – Bamboo, wicker, cane, rattan furniture
📌 940390 – Furniture parts

Example – Correct Classification: Wooden office desks → HSN 940330 (18%). Metal office chairs → HSN 940310 (18%). Bamboo stools → HSN 940380 (5%). Using wrong HSN can lead to show‑cause notices and penalties.

Takeaway: Always verify the correct HSN code for each product; do not rely solely on material.

4. GST Registration – Eligibility & Threshold

Under Section 22 of the CGST Act, registration is mandatory if aggregate turnover exceeds the threshold.

Business Type	Normal States	Special Category States
Furniture Traders / Manufacturers (Goods)	₹40 lakh	₹20 lakh
Furniture with Services (Interior design, installation)	₹20 lakh	₹10 lakh

Voluntary Registration: Even if below threshold, voluntary registration allows you to claim ITC on raw materials and expenses, reducing your tax liability.

Mandatory Registration Cases

📌 Making inter‑state supplies
📌 Supplying to government departments / PSUs
📌 Liable to pay tax under reverse charge
📌 Selling through e‑commerce platforms (Amazon, Flipkart)
📌 Non‑resident taxable persons

Takeaway: Evaluate your turnover and business activities to determine if registration is required or beneficial.

5. Step‑by‑Step GST Registration Process

1 Visit the GST Portal – www.gst.gov.in and select 'New Registration'.

2 Fill Part A – provide legal name (as per PAN), PAN, email, mobile – verify via OTP.

3 Receive TRN (Temporary Reference Number) on email/mobile.

4 Log in with TRN and complete FORM GST REG‑01 with business, principal place, and bank details.

5 Upload required documents – PAN, address proof, bank details, incorporation certificate, photographs.

6 Complete Aadhaar authentication (fast‑track) or physical verification by GST officer.

7 GSTIN is issued within 3‑7 working days.

Takeaway: Keep all documents ready and complete Aadhaar authentication for faster approval.

6. Documents Required for Registration

PAN Card of the business / proprietor / partners / directors
Aadhaar Card of all promoters / partners / directors
Proof of business address (rent agreement, electricity bill, or property tax receipt)
Bank account details (cancelled cheque or bank statement)
Shops & Establishments Registration / Incorporation Certificate / Partnership Deed
Photographs of the applicant / partners / directors
Digital Signature Certificate (DSC) – mandatory for companies and LLPs
List of business commodities (furniture, raw materials, etc.)

Tip for Showrooms: If you have multiple locations, register all additional places of business to claim ITC on stock stored at each location.

Takeaway: Prepare scanned copies of all documents before starting the online application.

7. Input Tax Credit (ITC) for Furniture Businesses

ITC eliminates the cascading effect of tax. For furniture businesses with high‑volume raw material purchases, ITC is a major cost‑saving tool.

Example – ITC Calculation

Particulars	Amount
Raw material purchase (plywood, MDF, hardware)	₹5,00,000
GST paid on purchase @18%	₹90,000
Sale of finished furniture	₹8,00,000
GST collected on sale @18%	₹1,44,000
ITC claimed	₹90,000
Net GST payable	₹54,000

Eligible ITC Items

✅ Raw materials – plywood, MDF, particle boards (18%), raw wood logs (5%), bamboo (5%)
✅ Metal hardware – hinges, channels, handles (18%)
✅ Shop expenses – rent, electricity, maintenance, security services
✅ Transportation – freight for inward/outbound logistics
✅ Advertising – brochures, digital ads, showroom signage
✅ Professional services – accounting, legal, GST filing fees
✅ Capital goods – POS systems, billing software, display racks, workshop machinery

Conditions for Claiming ITC – Section 16(2)

Valid Tax Invoice – Supplier must issue a GST‑compliant invoice with GSTIN, HSN, and tax amounts.
Receipt of Goods/Services – ITC can be claimed only upon actual receipt.
Tax Paid to Government – Supplier must have deposited the tax with the government.
Filing of Returns – ITC must be claimed in GSTR‑3B by the due date (20th of following month).

ITC Restrictions

❌ Blocked on Immovable Furniture – Built‑in wardrobes, fixed partitions, false ceilings (immovable) – ITC blocked.
✅ Allowed on Movable Furniture – Sofas, tables, beds, modular furniture – ITC allowed.
⚠️ Classification Tip: Do not capitalise interiors/furniture as "building" – classify under furniture & fixtures or plant & machinery.

Note: Under the new Invoice Management System (IMS) effective April 2026, verify all supplier invoices in GSTR‑2B before claiming ITC.

Takeaway: Claim ITC only on movable furniture and ensure all supplier invoices are valid.

8. Composition Scheme for Small Furniture Businesses

Furniture businesses with turnover up to ₹1.5 crore can opt for the composition scheme and pay a flat 1% GST (0.5% CGST + 0.5% SGST).

Category	Turnover Limit	GST Rate
Furniture Manufacturers / Traders	Up to ₹1.5 crore	1%
Service Providers (Interior design, installation)	Up to ₹50 lakh	6%

Restrictions under Composition

❌ Cannot claim ITC – you pay tax on turnover but cannot claim credit.
❌ Cannot make inter‑state sales – sales must be within the same state.
❌ Cannot sell through e‑commerce platforms (Amazon, Flipkart).
❌ Cannot supply to government departments.

Example: A showroom with turnover of ₹1.2 crore under composition pays GST of 1% = ₹1,20,000. Though it cannot claim ITC, compliance is simpler with quarterly returns.

Takeaway: Choose composition only if you operate within a single state, do not need ITC, and do not sell to large B2B buyers.

9. Reverse Charge Mechanism (RCM) for Furniture Businesses

Under RCM, the recipient (furniture business) pays GST instead of the supplier. This applies to:

📌 Goods Transport Agency (GTA) – GST @18% on transport services.
📌 Legal Services – from advocates.
📌 Import of Services – from foreign suppliers.
📌 Unregistered Suppliers – for specified goods.

Example – GTA RCM: A furniture manufacturer pays ₹15,000 to a GTA. The manufacturer must pay 18% GST = ₹2,700 under RCM. This GST can be claimed as ITC.

Takeaway: Identify all RCM transactions and ensure timely payment and ITC claim.

10. GST Returns – Filing Requirements

Return	Description	Due Date
GSTR‑1	Outward supplies (sales)	11th of following month
GSTR‑3B	Summary return with ITC and payment	20th of following month
GSTR‑9	Annual return	31 December
GSTR‑9C	Audit report (turnover > ₹5 crore)	31 December
GSTR‑4	Annual return for composition dealers	30 June

QRMP Scheme: Businesses with turnover up to ₹5 crore can opt for Quarterly Return Monthly Payment (QRMP).

E‑Invoicing: Manufacturers/wholesalers with turnover > ₹5 crore must generate e‑invoices.

Takeaway: File returns on time to avoid late fees and interest.

11. E‑Way Bill Compliance

📌 Applicability: Movement of furniture exceeding ₹50,000.
📌 Validity: 1 day per 100 km.
📌 Penalty: Up to ₹10,000 or tax evaded, whichever is higher.

Example: Dispatch of wardrobes worth ₹1,20,000 from Delhi to Jaipur (300 km) – generate e‑way bill valid for 3 days.

Takeaway: Always generate e‑way bill before dispatching high‑value consignments.

12. Common GST Mistakes & Solutions

Mistake: Wrong HSN classification (e.g., modular furniture as "wooden goods" at 12%).
✅ Solution: Use correct HSN 9403 (18%) and sub‑codes.

Mistake: Not updating rates after GST 2.0 (September 2025).
✅ Solution: Update billing software: bamboo 5%, glass/stone 18%, mattresses 18%.

Mistake: Claiming ITC on unverified invoices.
✅ Solution: Reconcile with GSTR‑2B before claiming.

Mistake: No e‑way bill for inter‑state dispatches.
✅ Solution: Generate e‑way bill for all movements > ₹50,000.

Mistake: Claiming ITC on immovable built‑in furniture.
✅ Solution: ITC allowed only on movable furniture.

Mistake: Missing 30 November ITC claim deadline.
✅ Solution: Claim all ITC by 30 November of the following FY.

Takeaway: Regular reconciliation and proper classification are key to avoiding penalties.

13. Penalties & Risks for Non‑Compliance

⏳ Late Filing: ₹50 per day (₹25 CGST + ₹25 SGST).
💰 Interest: 18% per annum on unpaid tax.
🔁 ITC Reversal: Wrongful availment – 100% reversal + 18% interest.
⚖️ Prosecution: Tax evasion above ₹5 crore – arrest under Section 132.
📩 Show Cause Notices: AI‑driven detection triggers penalties under Section 122.
🚚 E‑Way Bill: Penalty up to ₹10,000.

Case Study: A retailer wrongly classified modular furniture as "wooden goods" (12% instead of 18%). After audit, they received a notice for ₹18 lakhs.

Takeaway: Ensure correct HSN and rates to avoid hefty penalties.

14. Industry‑Specific GST Insights

Wooden Furniture

Raw materials: plywood, MDF (18%), raw wood (5%). Finished goods: 18%.

Metal Furniture

Steel/iron raw materials (18%). Finished metal furniture: 18%.

Bamboo/Cane/Rattan

Finished products attract only 5% (reduced from 12%).

Showrooms & Traders

ITC on stock, rent, electricity, advertising. Ensure correct HSN on invoices.

Modular Kitchen

Classified under HSN 9403, 18% GST. ITC on raw materials and hardware.

Office Furniture

Metal (HSN 940310) and wooden (HSN 940330) – both 18%.

Takeaway: Tailor your compliance based on your specific product mix.

15. Regular vs Composition Scheme

Parameter	Regular Scheme	Composition Scheme
Turnover Limit	No limit	Up to ₹1.5 crore
GST Rate	5% / 18%	1%
ITC Availability	✅ Yes	❌ No
Inter‑State Sales	✅ Allowed	❌ Not allowed
E‑Commerce Sales	✅ Allowed	❌ Not allowed
Government Supplies	✅ Allowed	❌ Not allowed
Returns	Monthly/QRMP	Quarterly + Annual
Invoice	Detailed with HSN	Simple with "Composition"

Takeaway: Regular scheme offers ITC and broader market access; composition suits small, intra‑state businesses.

16. Frequently Asked Questions

Wooden furniture attracts 18% GST under GST 2.0 (unchanged).

5% GST (reduced from 12% effective 22 September 2025).

18% GST (increased from 12% under GST 2.0).

₹40 lakh for traders/manufacturers (goods); ₹20 lakh if providing services.

Yes – ITC is available on all raw materials used in manufacturing.

1% GST (0.5% + 0.5%) for turnover up to ₹1.5 crore.

GSTR‑1 by 11th, GSTR‑3B by 20th of following month. Annual GSTR‑9 by 31 December.

Most furniture is under 9403; seats under 9401; mattresses under 9404.

17. Related GST Resources

GST Registration Guide Online GST Registration GST Return Filing Services GST Rates & Slabs 2026 Input Tax Credit (ITC) Guide E‑Way Bill Complete Guide GST Composition Scheme HSN Chapter 94 – Furniture & Bedding GST Invoice Format Documents for GST Registration