Impact of GST Rate on Furniture Manufacturers

GST on furniture hits every step, from raw wood sourcing all the way to that sofa landing in your living room. For manufacturers, it shapes input tax credits and how much it ultimately costs to make furniture. The 56th GST Council meeting made a significant impact by reducing the GST on eco-friendly, handmade, and bamboo-based furniture from 12% to a more competitive 5%. Meanwhile, regular wooden and metal furniture held steady at 18%. This move cuts costs for green makers but keeps mainstream pricing predictable.

Key Takeaways

• Bamboo, cane, or rattan furniture now enjoys a slick 5% GST rate.
• Most engineered wood products and furniture parts still face the usual 18%.
• Crucial raw materials, such as wood wool, particle boards, and bamboo joinery, account for 5% of the total.
• High-end metal and hospital furniture keep the 18% zone intact..

Recent GST Rate Updates for Furniture and Raw Materials

In September 2025, the GST rates for furniture and related materials underwent a significant overhaul. The update simplified slabs, making sustainable and artisanal furniture more affordable, while keeping traditional mass-produced items taxed higher. The intent? To help small manufacturers lower costs and encourage eco-friendly choices, all without shaking up the entire industry. Below, you’ll find the table that breaks down these rate changes.

GST Rates on Furniture and Related Raw Materials 

Impact of GST Changes on the Furniture Sector

Big wins for eco-conscious makers: If your furniture uses bamboo, cane, rattan, or particle boards from agricultural waste, your input taxes have just dropped from 12% to 5%. That’s less money going out and more breathing room for your margins.

Artisans and cottage industries get a leg-up: Thanks to lowered GST rates on handcrafted and sustainable products, small-scale producers can finally compete on price without compromising their craft.

Mainstream manufacturers stay steady: Regular wood, metal, and hospital furniture remain taxed at 18%, which keeps your pricing predictable and business models steady, no wild swings here.

Classification Matters: One misstep in HSN coding can turn tax savings into surprise bills. Nail your product classification; your tax compliance depends on it.

Market edge in green furniture: Lower taxes on sustainable materials might tip buyers’ scales in your favour if you can position your brand right.

Consumer pricing ripple: These changes aren’t just an accounting win; they can translate into competitive pricing for buyers who prefer environmentally friendly furniture.