Looking for expert help with Income tax and GST for beekeepers and honey processors India? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Loose natural honey is nil-rated. Natural honey pre-packaged and labelled is 5% (Notification 10/2025-CT(R), S. No. 19; Notification 9/2025-CT(R), Schedule I, S. No. 10). Beeswax is 5% however it's sold; artificial honey is 18%.
- "Pre-packaged and labelled" means retail packs of up to 25 kg that need Legal Metrology declarations. Your 30 kg cans and 300 kg drums to processors stay nil-rated.
- A beekeeper selling only loose natural honey needn't register for GST (Section 23(1)(a), CGST Act). Add labelled jars or beeswax and the nil sales count toward the Rs 40 lakh (Rs 20 lakh in Telangana) threshold.
- Income tax: bee-keeping is business income. Section 44AD deems 6% or 8% of turnover as profit; a new unit in the old regime can instead deduct its whole capital cost under Section 35AD.
- Cash paid to the beekeeper who produced the honey is exempt from the Rs 10,000 cash limit (Rule 6DD(e)(iv)). Belated AY 2026-27 returns can be filed until 31 December 2026.
What is the GST rate on honey? Natural honey (HSN 0409) is nil-rated when it isn't pre-packaged and labelled (S. No. 19, Notification 10/2025-Central Tax (Rate)). Pre-packaged and labelled, it's 5%: 2.5% CGST plus 2.5% SGST (S. No. 10, Schedule I, Notification 9/2025-Central Tax (Rate)), in force from 22 September 2025. Artificial honey (HSN 1702) is 18%.
Honey has the same two-way GST split as jaggery and pulses. The packing decides the rate, not the product. A 300 kg drum of raw honey that a beekeeper sends to a processor carries no GST. The same honey filtered and filled into a 500 g branded jar for a supermarket carries 5%. Most beekeepers who also bottle do both, and that split decides whether you register, how much credit you keep and what your CA reverses at year end. This guide is for beekeepers, honey collectors and traders, honey processing and packing units, and the CAs who keep their books. It covers GST from 22 September 2025 and income tax for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with the 2025 Act section numbers that apply from 1 April 2026.
Honey GST rate and HSN code: loose honey, packed honey and beeswax
Here's how each product a beekeeping or honey unit usually buys or sells is treated after the 22 September 2025 rate changes:
Comparison
GST on Honey, Beeswax and Beekeeping Inputs from 22 September 2025
| Product (HSN) | GST | Notification entry |
|---|---|---|
| Natural honey, not pre-packaged and labelled (0409) | Nil | 10/2025-CT(R), S. No. 19 |
| Natural honey, pre-packaged and labelled (0409) | 5% | 9/2025-CT(R), Schedule I, S. No. 10 |
| Artificial honey, whether or not mixed with natural honey (1702) | 18% | 9/2025-CT(R), Schedule II, S. No. 1 |
| Beeswax and other insect waxes, refined or not (1521) | 5% | 9/2025-CT(R), Schedule I, S. No. 98 |
| Candles, tapers and the like (3406) | 5% | 9/2025-CT(R), Schedule I, S. No. 253 |
| Bee-keeping machinery and parts (8436), on your purchase | 5% | 9/2025-CT(R), Schedule I, S. No. 434 |
Source: Notification 9/2025-Central Tax (Rate) and 10/2025-Central Tax (Rate), 17 September 2025, in force 22 September 2025. Notification 01/2026-Central Tax (Rate) amends none of these entries.
What "pre-packaged and labelled" means. Notification 9/2025-Central Tax (Rate) defines it as commodities intended for retail sale, containing not more than 25 kg or 25 litre, that are "pre-packed" under Section 2(l) of the Legal Metrology Act 2009 and must carry that Act's declarations on the package or a label. For a honey unit this works out as follows:
- Bulk honey to processors and exporters stays nil. A 30 kg can or a 300 kg drum is over 25 kg.
- Retail jars and pouches are 5%. 250 g, 500 g and 1 kg jars with your brand, net quantity and MRP printed on them are the typical case.
- A 5 kg or 20 kg tin sold to hotels or bakeries is the grey zone. It's under 25 kg, so the answer depends on whether it's meant for retail sale and needs Legal Metrology declarations. Settle this with your CA before you print labels.
Two other points. Artificial honey, or natural honey blended with it, falls under heading 1702 at 18%, not the honey entries. And the bee boxes, extractors and smokers you buy carry GST on your purchase bill; heading 8436 bee-keeping machinery is 5%, but check the HSN of each item with your supplier, because not everything sold for apiaries falls under 8436.
Do you need GST registration?
Not if all you sell is loose or bulk natural honey. Section 23(1)(a) of the CGST Act exempts a person "engaged exclusively in the business of supplying goods ... that are not liable to tax or wholly exempt from tax" from registering, whatever the turnover.
The moment you also sell something taxable, such as labelled jars, beeswax or wax candles, that exemption no longer applies. The normal threshold then kicks in, and it's tested on aggregate turnover, which Section 2(6) defines to include exempt supplies. So your nil-rated drum sales count.
Example (beekeeper in Telangana, FY 2026-27): you sell Rs 14 lakh of raw honey in 300 kg drums to a processor, Rs 6 lakh of 500 g branded jars and Rs 1 lakh of beeswax blocks. Aggregate turnover is Rs 21 lakh. Telangana is one of the States excluded from the Rs 40 lakh goods limit (Notification 10/2019-Central Tax), so your limit is Rs 20 lakh and you have to register. If you sold only the Rs 14 lakh of drums, you wouldn't need to. Our GST registration limit guide has the full State list.
A consignment of labelled jars or beeswax worth more than Rs 50,000 needs an e-way bill (Rule 138(1), CGST Rules). Nil-rated bulk honey is different: Rule 138(14)(e) says no e-way bill is needed for goods in the Schedule to Notification 2/2017-Central Tax (Rate), the nil-rate list that 10/2025-Central Tax (Rate) replaced from 22 September 2025. The rule still names the old notification, so confirm the position for your drum loads before you stop generating e-way bills. See our e-way bill guide.
Selling both loose and packed honey: the credit you have to reverse
Once registered, you can claim credit only for tax that relates to taxable sales. Section 17(2) of the CGST Act restricts credit on goods and services used partly for taxable and partly for exempt supplies to the share that goes into taxable supplies. Rule 42 of the CGST Rules works out that share in proportion to turnover.
Step-by-Step Guide
Working Out Your Credit as a Mixed Honey Unit
Credit used only for packed honey
Jars, caps, labels and retail cartons used only for 5% packs. Full credit.
Credit used only for bulk honey
Drums and cans used only for nil-rated bulk sales. No credit.
Common credit
Extractor and filter repairs, processing-room rent, freight and other inputs that serve both. Reverse the share equal to nil-rated turnover over total turnover (Rule 42).
True up at year end
Rule 42 is worked monthly and recomputed on the full year's turnover. Adjust the difference in your return.
Source: CGST Act 2017, Section 17(2); Rule 42, CGST Rules 2017
Example (one month): you sell Rs 9,00,000 of raw honey in drums (nil) and Rs 6,00,000 of labelled jars (5%, so Rs 30,000 output tax). Credit on jars, caps and labels is Rs 12,000. Common credit on filter repairs, rent and freight is Rs 10,000. Nil-rated turnover is 60% of the total (9 out of 15 lakh), so you reverse Rs 6,000 of the common credit and keep Rs 4,000. Total credit is Rs 16,000 (Rs 12,000 plus Rs 4,000), and you pay Rs 14,000 in cash (Rs 30,000 less Rs 16,000).
Our Rule 42 and 43 guide explains the formula and the annual recalculation.
Should a honey unit opt for composition?
It depends on whether you're a manufacturer or a trader for GST, because Rule 7 of the CGST Rules taxes them on different bases:
Comparison
Composition Rate for Honey Units (Rule 7, CGST Rules)
| Category | Combined rate | Charged on |
|---|---|---|
| Manufacturer (Rule 7, Sl. No. 1) | 1% (0.5% CGST + 0.5% SGST) | Turnover in State, which includes nil-rated sales (Section 2(112)) |
| Any other supplier, such as a trader (Rule 7, Sl. No. 3) | 1% (0.5% CGST + 0.5% SGST) | Turnover of taxable supplies only |
Source: CGST Act 2017, Sections 2(112) and 10(1); Rule 7, CGST Rules 2017; Notification 14/2019-Central Tax (Rs 1.5 crore limit)
Example: a unit with Rs 60 lakh of sales, Rs 40 lakh of it bulk honey and Rs 20 lakh labelled jars. As a trader under composition it pays 1% of Rs 20 lakh, which is Rs 20,000. If it counts as a manufacturer, it pays 1% of the full Rs 60 lakh, which is Rs 60,000, including Rs 40,000 on honey that's nil-rated under the regular scheme.
Which row you're in turns on Section 2(72) of the CGST Act: "manufacture" means processing that results in a new product with a distinct name, character and use. Filtering, warming and bottling natural honey leaves you with natural honey, so a plain packer may well fall in the trader row; a unit making flavoured or infused honey products may not. Get your CA's view in writing before you opt. Composition is open only if your aggregate turnover in the preceding year was within Rs 1.5 crore (Notification 14/2019-Central Tax), and not at all if you make inter-State sales (Section 10(2)(c)). You also can't charge GST on your invoice or claim credit. Our composition scheme guide covers the rest of the conditions.
Income tax: business income, 44AD and Section 35AD
Bee-keeping isn't agricultural income. Section 2(1A) of the Income-tax Act 1961 limits agricultural income to rent or revenue from land used for agricultural purposes, and income from such land by agriculture or by processing and selling the produce raised on it. Honey collected from bee boxes isn't produce raised by cultivating land, and the Act itself lists "bee-keeping and production of honey and beeswax" as a specified business in Section 35AD. So the profit is taxed as business income, even if your bee boxes sit on your own farm. If you also grow crops, keep the farm and apiary accounts separate; our agricultural income guide covers the crop side.
Presumptive tax under Section 44AD. Resident individuals, HUFs and partnership firms (not LLPs) with turnover up to Rs 2 crore can declare 6% of turnover received through banking channels and 8% of the rest as profit. The limit is Rs 3 crore if cash receipts don't exceed 5% of turnover. If you declare profit this way, you don't need a tax audit (first proviso to Section 44AB). From FY 2026-27, the same scheme sits in Section 58 of the Income-tax Act 2025.
Example (beekeeper-packer, FY 2025-26): turnover Rs 48,00,000, of which Rs 42,00,000 came by bank or UPI and Rs 6,00,000 in cash. Cash receipts are 12.5% of turnover, above 5%, so the limit is Rs 2 crore, and Rs 48 lakh is within it. Deemed profit is Rs 2,52,000 (6% of Rs 42,00,000) plus Rs 48,000 (8% of Rs 6,00,000), or Rs 3,00,000. Our Section 44AD guide covers the five-year lock-in if you later drop out.
Section 35AD: writing off the whole capital cost. A bee-keeping business that commenced operations on or after 1 April 2012 can opt to deduct the whole of its capital expenditure in the year it's spent, instead of claiming depreciation over many years (Section 35AD(1) and (5)(ag)). Land, goodwill and financial instruments don't qualify. The conditions are strict:
Step-by-Step Guide
Section 35AD Checklist for a Beekeeping Unit
New business
Not set up by splitting up or reconstructing an existing business, and not using plant or machinery previously used for any purpose (Section 35AD(2)).
Old tax regime
The default new regime under Section 115BAC computes income without the Section 35AD deduction (Section 115BAC(2)(i)). You'd have to opt out of the new regime.
Regular books, not 44AD
Under Section 44AD(2), deductions under Sections 30 to 38 are treated as already allowed, so 35AD gives nothing extra if you declare presumptive profit.
Use the assets for eight years
Assets claimed must be used only for the specified business for eight years; otherwise the deduction, less normal depreciation, is taxed back (Section 35AD(7A) and (7B)).
Ring-fenced losses
A loss from the specified business can be set off only against profit of a specified business, and is carried forward on the same basis (Section 73A).
Source: Income-tax Act 1961, Sections 35AD, 44AD(2), 73A and 115BAC(2); from 1 April 2026, Section 46 of the Income-tax Act 2025
Example (new unit, old regime, FY 2025-26): you start an apiary with 200 new bee boxes, an extractor, a filtering tank and a bottling line, costing Rs 8,00,000 in all, and keep regular books. Opting for Section 35AD lets you deduct the full Rs 8,00,000 that year. If your first-year profit before this deduction is Rs 3,00,000, you end with a Rs 5,00,000 loss, which you can carry forward only against future profit of a specified business. Whether the old regime suits you overall is a separate calculation; see our old vs new regime comparison.
AY 2026-27 dates. The 31 July 2026 due date for non-audit returns has passed. You can still file a belated return until 31 December 2026 (Section 139(4)), with a late fee of Rs 5,000, or Rs 1,000 if total income doesn't exceed Rs 5 lakh (Section 234F). See our belated return guide.
Cash to beekeepers and TDS from big buyers
Section 40A(3). A business expense is disallowed if you pay one person more than Rs 10,000 in cash in a day. Rule 6DD(e)(iv) of the Income-tax Rules 1962 exempts payments for "the products of horticulture or apiculture" made to the cultivator, grower or producer. If you're a honey trader or packer, Rs 45,000 in cash to the beekeeper who produced the honey stays deductible. The same Rs 45,000 to a collection agent or aggregator doesn't. Keep the beekeeper's name, village, the quantity and a signed receipt with each payment.
Section 269ST. Nobody may receive Rs 2 lakh or more in cash from one person in a day, for one transaction or for one event. A Rs 2,40,000 bill for a lot of drums can't be settled in cash in one go. See our cash limits guide.
TDS on your sales (Section 194Q). A buyer whose turnover exceeded Rs 10 crore in the previous year deducts 0.1% on purchases from you above Rs 50 lakh in a year. From 1 April 2026 the same rule is in Section 393(1) [Table: Sl. No. 8(ii)] of the Income-tax Act 2025, with "buyer" defined in Section 402(6). Example (FY 2026-27): a food company with Rs 200 crore turnover buys Rs 1,20,00,000 of bulk honey from you. TDS is 0.1% of Rs 70,00,000, which is Rs 7,000. It'll show in your annual tax statement, and you claim it as credit in your ITR. Our Section 194Q and 393 guide has the detail.
Common mistakes beekeepers and honey packers make
- Charging 5% on bulk drums. Packs above 25 kg aren't pre-packaged and labelled, so natural honey in them is nil-rated. Billing them at 5% collects tax the law doesn't levy.
- Not charging 5% on branded jars. Printing your brand, net quantity and MRP on a jar meant for retail sale moves it into the 5% entry.
- Treating beeswax like honey. Beeswax is 5% loose or packed. There's no nil entry for it.
- Calling apiary income agricultural. It's business income. Showing it as exempt agricultural income in your ITR won't match the law.
- Claiming Section 35AD under the new regime or 44AD. The deduction works only with regular books under the old regime, and assets have to stay in the business for eight years.
How Tax Garden helps beekeepers and honey units
We check whether you need to register, get you registered through our GST registration service when you do, and keep bulk and packed honey apart on every invoice. Every month we work out the Rule 42 reversal and file GSTR-1 and GSTR-3B through our GST return filing service. At year end we compare 44AD with regular books and Section 35AD, and file your return through our ITR filing service. Related reading: our guides for jaggery and khandsari units, which have the same loose-versus-packed split, and for FMCG distributors and stockists who buy branded honey.
