Looking for expert help with GST and income tax for pooja samagri shops 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
- Notification 10/2025-Central Tax (Rate), S. No. 167, exempts a named puja samagri list from 22 September 2025: rudraksha and rudraksha mala, tulsi kanthi mala, sacred thread, kalava, roli, chandan tika, vibhuti, panchamrit, panchgavya, wick for diya, wooden khadau and unbranded honey.
- Kumkum, bindi and sindur, clay diyas, clay idols, coconuts, fresh flowers and stone or wooden deities are also nil.
- Agarbatti, dhoop, ghee, candles, brass idols, hawan samagri and rosaries are 5%. Artificial flowers and festive decorations are 18%.
- A pooja kit sold for one price is taxed at the highest rate inside it. Price items separately if you want each to keep its own rate.
- Exempt sales still count towards the GST registration limit, which is Rs 20 lakh in Telangana and Rs 40 lakh in most other States.
What is the GST rate on pooja samagri? From 22 September 2025, most daily pooja items are GST-free. Notification 10/2025-Central Tax (Rate) exempts kumkum, roli, vibhuti, chandan tika, kalava, sacred thread, rudraksha mala, diya wicks and clay diyas. Agarbatti, dhoop, ghee, candles and brass idols are 5% under Notification 9/2025-Central Tax (Rate). Artificial flowers and decorations are 18%.
A pooja samagri shop near a temple sells three kinds of goods off the same counter. Some of them are GST-free, some are 5% and a few are 18%. A customer picks up a packet of kumkum, a box of agarbatti, a brass lamp and a plastic garland, and the bill has three rates on it. Most of the tax questions shop owners bring us come from that mix. Which items are really nil? Does a nil sale count for the registration limit? Is composition worth it? What happens to a Diwali pooja kit sold at Rs 501? This guide answers them for shop owners and the CAs who keep their books. It covers GST law in force from 22 September 2025 and income tax for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with Income-tax Act 2025 references from 1 April 2026.
Pooja samagri GST rates, item by item
The rate depends on which entry the item is listed under, not on the fact that it's used in worship. The nil entry for "puja samagri" covers only the items named in the ten clauses of S. No. 167. Everything else takes the rate of its own tariff heading.
Comparison
GST on Common Pooja Shop Items (from 22 September 2025)
| Item (HSN) | GST | Entry |
|---|---|---|
| Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (any chapter) | Nil | 10/2025-CT(R), S. No. 167(i) |
| Sacred thread (yagnopavit), wooden khadau, panchamrit, vibhuti, unbranded honey | Nil | 10/2025-CT(R), S. No. 167(ii) to (vi) |
| Wick for diya, roli, kalava (raksha sutra), chandan tika | Nil | 10/2025-CT(R), S. No. 167(vii) to (x) |
| Kumkum, bindi, sindur, alta (3304) | Nil | 10/2025-CT(R), S. No. 117 |
| Earthen pots and clay lamps (6912 00 40); idols made of clay (69) | Nil | 10/2025-CT(R), S. No. 151 and 152 |
| Deities made of stone, marble or wood (44 or 68) | Nil | 10/2025-CT(R), S. No. 124 |
| Coconuts, fresh or dried (0801); cut flowers (06); leaf plates and cups (46) | Nil | 10/2025-CT(R), S. No. 43, 26 and 126 |
| Agarbatti, lobhan, dhoop batti, dhoop, sambraani (3307 41 00) | 5% | 9/2025-CT(R) Schedule I, S. No. 250 |
| Ghee (0405) | 5% | 9/2025-CT(R) Schedule I, S. No. 7 |
| Candles (3406); matches (3605 00 10) | 5% | 9/2025-CT(R) Schedule I, S. No. 253 and 256 |
| Idols of wood, stone or base metal, other than precious metal (44, 68, 83) | 5% | 9/2025-CT(R) Schedule I, S. No. 293 |
| Bells, gongs, statuettes of base metal (8306); household articles of copper (7418) | 5% | 9/2025-CT(R) Schedule I, S. No. 420 and 417 |
| Rosaries, prayer beads, hawan samagri (any chapter) | 5% | 9/2025-CT(R) Schedule I, S. No. 515 |
| Silver articles and idols (7114) | 3% | 9/2025-CT(R) Schedule IV, S. No. 11 |
| Other burning preparations under 3307 41 00 (other than agarbatti, dhoop etc.) | 18% | 9/2025-CT(R) Schedule II, S. No. 65 |
| Artificial flowers and garlands (6702); festive decorations (9505) | 18% | 9/2025-CT(R) Schedule II, S. No. 214 and 618 |
Source: Notifications 9/2025 and 10/2025-Central Tax (Rate), read from taxinformation.cbic.gov.in. The 2026 rate notifications (01/2026 to 10/2026-CT(R)) don't change any of these entries. IGST on inter-State sales is the same total rate.
Four points from the table trip shop owners up:
- Stone and wooden deities are nil, metal idols are 5%. S. No. 293 of 9/2025 lists idols of wood, stone and metal at 5%. S. No. 124 of 10/2025 separately exempts "deities made of stone, marble or wood". So a marble Ganesha or a carved wooden Balaji is nil, and a brass Lakshmi is 5%. A silver idol isn't a base metal idol at all; it's 3%.
- Diya wicks are nil, but other textile wicks are 5%. "Wick for diya" is in the puja samagri list. Heading 5908 (textile wicks for lamps, stoves and candles) is 5% under S. No. 383 of Schedule I. Bill cotton diya batti as "wick for diya".
- A rudraksha mala is nil, a packet of rudraksha seeds isn't. The mala is exempt under S. No. 167(i). Rudraksha seeds of heading 1404 sit in S. No. 76 of Schedule I at 5%, and other rosaries and prayer beads are 5% under S. No. 515.
- Camphor isn't on any nil list. Whether your supplier bills it as a Chapter 29 organic chemical (Schedule II, S. No. 36) or as a burning preparation of 3307 41 00 other than agarbatti (Schedule II, S. No. 65), the rate is 18%. Check your purchase invoice and use the same HSN.
Pooja kits and combo packs: the mixed supply rule
Festival kits are the biggest GST trap in this trade. A "Diwali pooja kit" or "Satyanarayan pooja set" puts 10 or 15 items in one bag for one price.
Section 2(74) of the CGST Act calls this a mixed supply: two or more individual supplies made together "for a single price", where each item can be sold on its own. Section 8(b) then taxes the whole kit at the rate of the item with "the highest rate of tax".
Step-by-Step Guide
Worked Example: Rs 501 Diwali Pooja Kit
What's inside
Kumkum and roli (nil), cotton diya wicks (nil), 6 clay diyas (nil), a box of agarbatti (5%), a small ghee pack (5%) and a plastic marigold garland (18%). The shop sells the bag for Rs 501, tax included.
Single price = mixed supply
Each item can be sold separately and isn't dependent on the others, so the kit is a mixed supply under Section 2(74).
Highest rate applies
The plastic garland is 18% (heading 6702), so the whole kit is taxed at 18% under Section 8(b).
Tax inside Rs 501
Rs 501 x 18 / 118 = Rs 76.42 GST. Taxable value Rs 424.58.
Fix: drop or price the garland separately
Take the garland out and sell it as its own line item at Rs 60 (Rs 9.15 GST at 18%). The kit now has 5% as its highest rate. If the kit sells for Rs 441, the GST inside is Rs 441 x 5 / 105 = Rs 21. Same goods, Rs 46.27 less tax.
Or bill every item separately
Section 2(74) says it isn't a mixed supply if the items are supplied separately. Itemise each product with its own price and HSN on the invoice, and each keeps its own rate.
Source: CGST Act 2017, Sections 2(74) and 8(b); rates from Notifications 9/2025 and 10/2025-CT(R)
If you're on composition, the kit question mostly goes away, because you pay a flat rate on taxable turnover. But you still need to know whether the kit is taxable at all. A kit is taxable as long as it holds even one taxable item.
When a pooja shop must register for GST
A shop that sells only nil items needs no registration. Section 23(1)(a) of the CGST Act says a person "engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt" isn't liable to register. A small stall selling only flowers, coconuts, kumkum and clay diyas falls here, at any turnover.
One taxable line changes that. Once you sell agarbatti or ghee, the normal turnover limit applies. A person supplying only goods can stay unregistered up to Rs 40 lakh (Notification 10/2019-Central Tax). Telangana, Puducherry, Uttarakhand and the listed north-eastern States are excluded from that notification. In Telangana the limit stays at Rs 20 lakh. Our GST registration limit guide has the State-wise list.
Exempt sales count. Aggregate turnover includes "exempt supplies" (Section 2(6) of the CGST Act). Say a shop near a Hyderabad temple sells Rs 15 lakh of nil items (flowers, coconuts, kumkum, diyas) and Rs 8 lakh of agarbatti, ghee and brass items in a year. Taxable sales are only Rs 8 lakh, but aggregate turnover is Rs 23 lakh. That's above Telangana's Rs 20 lakh limit, so the shop must register.
Selling pooja items to a customer in another State, for example by courier, makes registration compulsory from the first taxable sale (Section 24(i)). Our GST registration service handles the application.
Composition or regular GST for a pooja shop?
For many pooja shops, composition is the better fit. A trader on composition pays 0.5% CGST plus 0.5% SGST on "the turnover of taxable supplies of goods and services in the State" (Rule 7 of the CGST Rules, Table S. No. 3). Exempt sales are outside that base.
Take the Hyderabad shop above. On composition, it pays 1% of Rs 8 lakh, which is Rs 8,000 for the year. The Rs 15 lakh of nil sales adds nothing. Composition is open if aggregate turnover in the previous year was within Rs 1.5 crore (Notification 14/2019-Central Tax).
Comparison
Composition vs Regular GST for a Pooja Shop
| Point | Composition | Regular |
|---|---|---|
| Tax rate | 1% (0.5% CGST + 0.5% SGST) on taxable sales only | Item rate: nil, 5%, 18% or 3% |
| Input tax credit | Not available | Available, with Rule 42 reversal for nil sales |
| Collect GST from customers | No, issue a bill of supply | Yes, on a tax invoice |
| Sales to other States | Not allowed (Section 10(2)(c)) | Allowed |
| Returns | CMP-08 quarterly, GSTR-4 annual | GSTR-1 and GSTR-3B |
| Best for | Shops selling locally, mostly at retail | Shops supplying temples, caterers or businesses that want credit |
Source: CGST Act 2017, Section 10; CGST Rules, Rule 7; Notification 14/2019-Central Tax
If you stay regular, Rule 42 applies. You'll reverse part of the GST on common costs every month. The formula is D1 = (E ÷ F) x C2, where E is exempt turnover, F is total turnover and C2 is common credit. If nil items are 60% of a month's sales and your common credit (billing software, carry bags, phone bill) is Rs 2,000, you reverse Rs 1,200. Credit on stock you resell at 5% or 18% isn't common credit, so you keep it in full. Our Rule 42 guide explains the annual true-up, and the composition scheme guide covers the switch-over.
Income tax for pooja shop owners: Section 44AD and cash buying
Section 44AD. A resident individual, HUF or partnership firm (not an LLP) running a pooja shop can declare presumptive profit of 6% of digital receipts and 8% of the rest (Section 44AD of the 1961 Act for FY 2025-26; Section 58 of the Income-tax Act 2025 from 1 April 2026, same rates and limits). The turnover limit is Rs 2 crore, or Rs 3 crore if cash receipts are within 5% of turnover. Exempt GST sales are still business turnover for income tax.
Example: a proprietor's FY 2025-26 sales are Rs 90 lakh: Rs 60 lakh by UPI and card, Rs 30 lakh in cash. Deemed profit is 6% of Rs 60 lakh (Rs 3,60,000) plus 8% of Rs 30 lakh (Rs 2,40,000), so Rs 6,00,000. Under the new regime, tax is nil up to Rs 4 lakh and 5% of the next Rs 2 lakh, so Rs 10,000. Total income is within Rs 12 lakh, so the Section 87A rebate (up to Rs 60,000) wipes out the Rs 10,000, and the tax is nil. The return still has to show at least Rs 6,00,000 of profit, unless you keep books and get them audited. Our Section 44AD guide covers the five-year lock-in if you opt out.
Cash paid to suppliers. A business expense paid in cash above Rs 10,000 to one person in a day is disallowed under Section 40A(3) of the 1961 Act (Section 36(4) of the 2025 Act). Payments for agricultural produce made directly "to the cultivator, grower or producer" are an exception (Rule 6DD(e) of the 1962 Rules; Rule 26(1)(e)(i) of the Income-tax Rules 2026). Say you pay a flower grower Rs 18,000 in cash before Navratri: if you bought directly from the grower, keep a signed voucher with their name and village. Pay a flower market wholesaler Rs 18,000 in cash and the whole amount is disallowed. Our Section 40A(3) guide lists every exception. You'll file your return through our ITR filing service.
Common mistakes pooja shops make
- Treating every pooja item as nil. Only the listed items are exempt. Agarbatti, ghee, candles, brass idols and hawan samagri are 5%, and camphor and plastic garlands are 18%.
- Billing a Diwali kit at 5% when it has an 18% item inside. A single-price kit takes the highest rate (Section 8(b)).
- Leaving nil sales out of the registration test. Flowers and coconuts still count towards the Rs 20 lakh or Rs 40 lakh limit.
- Charging 5% on a marble or wooden deity. Stone, marble and wooden deities are nil under S. No. 124. Only metal idols are 5%.
- Opting for composition and then couriering to another State. One inter-State sale breaks Section 10(2)(c).
- Claiming full credit on common costs as a regular dealer. Reverse the exempt share every month under Rule 42.
How Tax Garden helps pooja samagri shops
We map every item on your shelf to its HSN and rate, set up nil, 5%, 18% and 3% lines in your billing software, and check your festival kits before the season starts. Our GST return filing service files your CMP-08 or GSTR-1 and GSTR-3B, and new shops can start with GST registration. If you make the goods you sell, see our guides for agarbatti makers, clay diya and pottery makers and candle makers. If you also stock gifts, read our gift shop GST guide.
