Looking for expert help with Watch GST rate and HSN code? 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
- Wrist watches, pocket watches, clocks, straps, movements and parts (headings 9101 to 9114) are all 18% GST (Notification 9/2025-CT(R), Schedule II, S. Nos. 583 to 596).
- A gold-cased watch is 18%, not 3%. Heading 9101 is a watch heading, not a jewellery heading.
- A wrist watch sold for more than Rs 10 lakh attracts 1% TCS (CBDT Notification 36/2025; Section 206C(1F) for FY 2025-26, Section 394(1) Table Sl. No. 6 from 1 April 2026).
- Repairs and battery changes are an 18% service. Free warranty work done for the brand carries no GST (CBIC Circular 195/07/2023-GST).
- Income tax: Section 44AD (6% or 8%) for FY 2025-26; belated AY 2026-27 returns close on 31 December 2026.
What is the GST rate and HSN code for watches? Watches attract 18% GST (9% CGST plus 9% SGST). Gold, silver or platinum-cased watches fall under HSN 9101 and all other wrist watches under HSN 9102, both in Schedule II of Notification 9/2025-Central Tax (Rate), effective 22 September 2025. Clocks (9103 to 9105), straps (9113) and parts (9114) are also 18%.
A watch shop looks simple from a tax point of view. Almost everything on the counter is 18%. The questions that actually reach us are about the edges: the gold watch a customer assumes is billed like jewellery, the Rs 12 lakh piece that needs TCS, the battery swap, the brand warranty job, and the pre-owned watch you bought from a collector. This post covers those for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with the Income-tax Act 2025 sections that apply from 1 April 2026. It's written for watch and clock retailers, authorised brand dealers, repairers and their accountants.
What GST rate applies to each thing you sell?
Every heading in Chapter 91 of the tariff, which covers watches and clocks, sits in Schedule II of Notification 9/2025-CT(R), the 18% schedule. So does the button cell you fit at the counter.
Tax Rate Chart
GST for Watch and Clock Shops (from 22 September 2025)
Watches with case of precious metal or metal clad with precious metal (9101)
9/2025-CT(R) Sch II, S. No. 583
All other wrist watches, pocket watches and stop-watches (9102)
9/2025-CT(R) Sch II, S. No. 584
Clocks with watch movements (9103) and vehicle dashboard clocks (9104)
Sch II, S. Nos. 585 and 586
Other clocks: wall, table and alarm clocks (9105)
Sch II, S. No. 587
Watch and clock movements, complete or partly assembled (9108 to 9110)
Sch II, S. Nos. 590 to 592
Watch cases and clock cases (9111, 9112)
Sch II, S. Nos. 593 and 594
Watch straps, bands and bracelets of any material (9113)
Sch II, S. No. 595
Other clock or watch parts: crowns, glass, hands, dials (9114)
Sch II, S. No. 596
Button cells and other primary batteries (8506)
Sch II, S. No. 479
Repair, servicing and battery replacement (9987)
11/2017-CT(R) S. No. 25
Source: CBIC Notifications 9/2025-CT(R) and 11/2017-CT(R); CT(R) list checked up to 10/2026-CT(R) (27-28 October 2026), none of which amends Chapter 91 or heading 8506
Gold watches. Heading 9101 covers watches "with case of precious metal or of metal clad with precious metal". It's in the 18% schedule. The 3% rate in Schedule IV is for articles of jewellery under heading 7113, and a watch isn't one. If you're a jeweller who also stocks gold watches, set them up as a separate item with HSN 9101, or your billing software will apply 3% from the jewellery master. Our gold jewellery GST guide covers the jewellery side.
Smartwatches. Depending on the product, a smartwatch is classified under 9102 or under 8517 (communication apparatus). Heading 8517 is also in Schedule II at 18% (S. No. 490), so the rate doesn't change. Use the HSN your supplier uses so your buyer's GSTR-2B matches. Our mobile phones and electronics GST guide covers fitness bands and other wearables.
Example: a counter sale. A customer buys a steel analogue watch priced at Rs 25,000 before tax. CGST is Rs 2,250 and SGST is Rs 2,250, so the bill comes to Rs 29,500. The same customer comes back a year later for a battery change at Rs 250 before tax. That's Rs 45 GST, and the bill is Rs 295.
If you also sell gifts or optical frames from the same shop, our gift shop owners guide and optical shop owners guide have those rates.
When do you collect 1% TCS on a luxury watch?
This is the one most shops miss. From 22 April 2025, CBDT Notification 36/2025 (S.O. 1825(E)) added "any wrist watch" of value exceeding Rs 10 lakh to the goods covered by Section 206C(1F) of the 1961 Act. The seller collects TCS at 1% of the sale consideration from the buyer when the money is received. The same list covers handbags, sunglasses, shoes, art and a few other luxury goods.
From 1 April 2026 the levy is in Section 394(1), Table Sl. No. 6(b) of the Income-tax Act 2025 ("sale consideration exceeding ten lakh rupees" for notified goods, at 1%). Section 536(2)(j) keeps a notification issued under the 1961 Act in force under the corresponding provision of the new Act, so wrist watches stay covered.
Who must collect. A company, firm or co-operative society always counts as a "seller". An individual or HUF counts only if total sales, gross receipts or turnover from the business exceeded Rs 1 crore in the previous year (Section 206C, Explanation (c) of the 1961 Act; Section 402(33)(a)(v) of the 2025 Act). Most authorised luxury dealers cross that easily.
Only wrist watches. The notification says "any wrist watch". A Rs 15 lakh grandfather clock or a pocket watch isn't on the list.
Example. An authorised dealer run as a partnership firm sells a wrist watch for a sale consideration of Rs 14,00,000. That's above Rs 10 lakh, so the firm collects 1%, Rs 14,000, from the buyer, deposits it, and reports it in the quarterly TCS statement. A watch sold for exactly Rs 10,00,000 doesn't qualify, because the entry says "exceeding".
We haven't found a CBDT circular on whether GST forms part of the "sale consideration" for this entry, or on a single bill carrying two watches of Rs 6 lakh each. Settle both with your accountant before you set up the billing rule.
Filing. You need a TAN. For collections up to 31 March 2026 the quarterly statement is Form 27EQ. From tax year 2026-27 it's Form No. 143 (Rule 219 of the Income-tax Rules 2026, Table Sl. No. 4, for Section 394(1)). Our TCS guide explains deposit and statements, and our TDS and TCS filing service files them.
Repairs, warranty jobs and pre-owned watches
Paid repairs. Servicing a movement, replacing a crystal or changing a battery is a maintenance and repair service under heading 9987, taxed at 18% (Notification 11/2017-CT(R), S. No. 25). A job that includes a part is usually one composite supply where the repair is the main supply (Section 8 of the CGST Act). Since the part and the service are both 18%, the rate comes out the same either way.
Brand warranty work. CBIC Circular 195/07/2023-GST settles the common cases:
Step-by-Step Guide
GST on Warranty Jobs at an Authorised Dealer
Free repair or part for the customer
If you fix or replace a part under the brand's warranty and charge the customer nothing, you pay no GST on it (S. No. 3). The tax was paid on the original sale price, which already included the likely warranty cost.
Customer pays something extra
If you charge the customer for a part or service outside the warranty, GST is payable on that extra amount.
You bill the brand for the part
If you use your own stock and invoice the brand for it, you pay GST on that invoice, the brand takes credit, and you don't reverse any credit (S. No. 4(a)).
The brand sends you the part
If the brand supplies the part free for the warranty job, the brand pays no GST on it and doesn't reverse credit (S. No. 4(b)).
You bill the brand for labour
If you charge the brand for the repair service by tax invoice or debit note, GST is payable on that charge and the brand can claim credit (S. No. 5).
Extended warranty
Sold with the watch, it's part of one composite supply of the watch. Sold later, it's a separate contract taxed on its own terms (S. No. 6).
Source: CBIC Circular No. 195/07/2023-GST dated 17 July 2023
Pre-owned watches. If you deal in buying and selling used watches and didn't take input tax credit on the purchase, Rule 32(5) of the CGST Rules lets you value the supply at the difference between your selling price and your purchase price. A negative difference is ignored.
Example. You buy a pre-owned luxury watch from a collector for Rs 4,00,000 (no GST, no credit) and sell it for Rs 4,60,000. The value of supply is the Rs 60,000 margin, so GST at 18% is Rs 10,800 instead of Rs 82,800 on the full price. Our margin scheme guide explains the conditions. A pre-owned wrist watch sold for more than Rs 10 lakh still attracts 1% TCS if you're a covered seller, because the notification doesn't distinguish new from used.
Registration and the composition scheme
Section 22(1) of the CGST Act sets the registration limit at Rs 20 lakh, or Rs 10 lakh in special category States. A supplier engaged exclusively in supplying goods can go up to Rs 40 lakh under Notification 10/2019-Central Tax, but not in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand. A shop that bills repairs supplies services too, so the Rs 20 lakh limit applies wherever you are.
Example. A Hyderabad shop sells Rs 17 lakh of watches and clocks and bills Rs 4 lakh of repairs in a year. Aggregate turnover is Rs 21 lakh, above Rs 20 lakh, so it must register. Our registration limit guide has the detail, and our GST registration service files the application.
Composition. If your aggregate turnover in the previous year didn't exceed Rs 1.5 crore (Rs 75 lakh in some hill and north-eastern States, Notification 14/2019-Central Tax), you can pay half a per cent CGST plus half a per cent SGST on "the turnover of taxable supplies of goods and services" (Rule 7, Table Sl. No. 3). Three conditions catch watch shops:
- Repairs are capped. The second proviso to Section 10(1) allows services worth up to 10% of the previous year's turnover in the State or Rs 5 lakh, whichever is higher. A shop with Rs 60 lakh turnover last year can bill up to Rs 6 lakh of repairs this year.
- No online marketplace sales. Section 10(2)(d) bars supplies through an e-commerce operator that collects tax under Section 52. Listing your watches on a marketplace takes you out of composition.
- No inter-State sales (Section 10(2)(c)), and no input tax credit.
Our composition scheme guide has the full list.
Comparison
Regular Scheme vs Composition for a Watch Shop
| Parameter | Regular scheme | Composition scheme |
|---|---|---|
| Tax on watch sales | 18% charged on the bill | 1% of taxable turnover, paid from your margin |
| Input tax credit on stock | Allowed | Not allowed |
| Repair income | No limit, 18% | Up to 10% of last year's turnover or Rs 5 lakh, whichever is higher |
| Marketplace and inter-State sales | Allowed | Not allowed (Section 10(2)(c) and (d)) |
| Document you issue | Tax invoice | Bill of supply |
| Selling to businesses | Buyer can claim credit | Buyer can't claim credit |
Source: CGST Act Sections 10(1), 10(2), 31(3)(c); CGST Rule 7; Notification 14/2019-Central Tax
Income tax for watch shop owners
Section 44AD. For FY 2025-26, a resident individual, HUF or partnership firm (not an LLP) can declare 6% of turnover received by bank transfer, UPI or other prescribed digital modes, and 8% of the rest, under Section 44AD of the 1961 Act. The limit is Rs 2 crore, or Rs 3 crore where cash receipts don't exceed 5% of turnover. From 1 April 2026 it's Section 58(2), Table Sl. No. 1 of the 2025 Act.
Example. Turnover for FY 2025-26 is Rs 80,00,000: Rs 65,00,000 by UPI, cards and bank transfer, and Rs 15,00,000 in cash. Deemed profit is 6% of Rs 65,00,000 (Rs 3,90,000) plus 8% of Rs 15,00,000 (Rs 1,20,000), a total of Rs 5,10,000. See our Section 44AD guide.
Tax audit. Section 44AB doesn't apply to a person who declares profit under Section 44AD(1). Otherwise accounts need an audit once turnover exceeds Rs 1 crore, or Rs 10 crore where cash receipts and cash payments each stay within 5% (Section 44AB(a) of the 1961 Act; Section 63(1) of the 2025 Act). A luxury dealer selling Rs 14 lakh watches will usually be past the 44AD limit and keep full books.
Cash on premium watches. Don't accept Rs 2 lakh or more in cash from one customer in a day, on one bill, or for one event or occasion, other than by account payee cheque, bank draft or bank transfer (Section 269ST of the 1961 Act; Section 186 of the 2025 Act). The penalty equals the amount received (Section 271DA; Section 451 of the 2025 Act). Our cash transaction limits guide explains the rule.
Deadline Timeline
Dates Still Open for Watch Shops
ITR for audit cases (AY 2026-27)
Belated return (AY 2026-27)
TCS statement on luxury watch sales
Source: Income-tax Act 1961 Sections 139(4) and 234F; CBDT Circular 07/2026; Income-tax Rules 2026 Rule 219
Common mistakes watch shops make
- Billing a gold watch at 3%. Heading 9101 is 18%. The jewellery rate doesn't apply.
- Missing TCS on a watch above Rs 10 lakh. A firm or a company always collects it; an individual owner does once last year's turnover passed Rs 1 crore.
- Charging GST on a free warranty repair. If the customer pays nothing and you do it for the brand, there's no GST on it. Bill the brand properly if you're reimbursed.
- Charging 18% on the full price of a pre-owned watch. If you took no credit on the purchase, Rule 32(5) lets you pay on the margin.
- Staying in composition while selling on a marketplace. Section 10(2)(d) rules that out.
- Taking Rs 2 lakh or more in cash for one watch. The penalty equals the cash received.
How Tax Garden helps watch shop owners
We set up your item masters so every watch, clock, strap and cell carries the right HSN code, separate warranty jobs from paid repairs, and collect and report TCS on luxury watch sales through our TDS and TCS filing service. We file GSTR-1 and GSTR-3B through our GST return filing service, keep your books through our accounting and bookkeeping service and file your return through our ITR filing service. Call or WhatsApp us on 9640290977.
Related reading: Jewellers and goldsmiths guide | Electronics shop owners guide | Musical instrument shop owners guide | GST invoice rules and format
