HSN Code for Petrochemicals India 2026: Classification, Nil Duty Rates and Import Duty Guide

Petrochemicals in India fall mainly under two HSN chapters: 2707-2711 (Chapter 27, 5% IGST) and 2901-2902 (Chapter 29, 18% IGST). Most feedstocks carry Nil Basic Customs Duty. The critical distinction - which most import sources don't bother to explain clearly - is that the same chemical compound can attract 5% or 18% IGST depending on whether it came from coal-tar distillation or petrochemical processing.

What Are Petrochemicals and Why HSN Classification Matters in India

Petrochemicals are chemical compounds derived from petroleum and natural gas. They feed thousands of downstream industries: plastic packaging, synthetic fibres, detergents, solvents, pharmaceutical intermediates - all trace back to petrochemical imports.

A single digit wrong on an 8-digit HSN code can mean paying 5% IGST instead of 18% - on shipments worth crores. It can mean a shipment cleared in hours versus one held at port pending re-assessment. And it can mean the difference between a valid duty exemption and a customs demand letter arriving months later.

India's customs framework splits petrochemicals across two chapters. Chapter 27 covers mineral fuels and petroleum products. Chapter 29 covers organic chemicals. Both are relevant to petrochemical importers, but they carry different IGST rates - a distinction that is poorly understood and frequently misrepresented in industry guidance.

For anyone importing petrochemicals into India - freight forwarder filing the Bill of Entry, compliance officer verifying duty, or manufacturer sourcing feedstocks - the HSN code determines your duty liability. It is not an administrative detail.

HSN Code for Petrochemicals India - Chapter 27 and Chapter 29 Breakdown

India's Harmonised System of Nomenclature classifies petrochemicals across two primary chapters. Which chapter applies is the first and most consequential classification decision.

Chapter 27 - Mineral Fuels, Petroleum Oils and Their Distillation Products

Chapter 27 captures products obtained from coal tar distillation or petroleum refining - the downstream aromatic products. Key sub-chapters for petrochemical importers:

• HSN 2707 - Distillation products of high temperature coal tar: benzene, toluene, xylene, naphthalene
• HSN 2710 - Petroleum oils and oils from bituminous minerals (naphtha, light petroleum oils)

Chapter 27 products attract 5% IGST. Basic Customs Duty is Nil on most lines under current exemption notifications. Social Welfare Surcharge is therefore also effectively Nil - SWS is 10% of BCD, and Nil times 10% is Nil.

Chapter 29 - Organic Chemicals

Chapter 29 is the broader chapter for organic chemical compounds. The most relevant sub-chapter for petrochemical importers is HSN 2902 - cyclic aromatic hydrocarbons. This covers benzene, toluene, xylene, styrene, and related compounds when they are of petrochemical rather than coal-tar origin. Chapter 29 also covers HSN 2905 (alcohols), HSN 2906 (cyclic alcohols), HSN 2909 (ether-alcohols), and polymer codes like HSN 3901-3904.

Chapter 29 products attract 18% IGST. Like Chapter 27, most Chapter 29 petrochemical codes carry Nil BCD under current exemption notifications.

Here is the practical implication: the same chemical compound can carry two different HSN codes and two different IGST rates depending on its source. Coal-tar benzene (HSN 2707.10) = 5% IGST. Petrochemical benzene (HSN 2902.20) = 18% IGST. Importers who don't verify manufacturing origin risk over-paying duty or triggering customs disputes.

Petrochemical HSN Quick Reference Table - All Key Codes with Duty Rates

Chapter 27 - 5% IGST

Chapter 29 - 18% IGST

Source: CBIC Customs Tariff 2024-2026, Chapter 27 and Chapter 29. For the authoritative CBIC tariff schedules, see CBIC Chapter 27 Tariff PDF and CBIC Chapter 29 Tariff PDF.

Why Are Most Petrochemical HSN Codes Subject to Nil Basic Customs Duty

India's Nil BCD on most petrochemical feedstocks is deliberate policy, in place since 2022, aimed at making India's domestic refining and chemical manufacturing sector globally competitive.

The logic: India competes with producers in the Middle East and ASEAN who benefit from significantly lower feedstock costs. Saudi Arabia, Qatar, and the UAE have access to natural gas at subsidised industrial rates. ASEAN producers get preferential treatment under regional trade agreements. Without customs duty exemption, Indian manufacturers start at a structural cost disadvantage on their very first input.

The Nil BCD covers the broadest range of petrochemical feedstocks - aromatics like benzene, toluene, and xylene; olefins like ethylene and propylene; polymer-grade inputs. The policy has been extended through multiple CBIC notifications, with the most recent amendments incorporated in the 2026 tariff schedule.

Social Welfare Surcharge (SWS) adds a layer. SWS is 10% of BCD. Where BCD is Nil, SWS is Nil too. So the total customs duty outflow on most petrochemical imports is zero on the customs component - BCD plus SWS equals nothing. There are no active proposals to impose SWS on Nil-rated lines.

But Nil BCD is not automatic. It depends on specific exemption notifications, and those notifications come with conditions. Importers must confirm the specific exemption notification applicable to their consignment, particularly for products with end-use restrictions or sector-specific allocations. A consignment that qualifies for Nil BCD under one notification may attract duty under another if the importer can't demonstrate eligible end-use.

Anti-dumping duties are a separate consideration. Even where BCD is Nil, anti-dumping duties may apply for specific source countries - particularly China and Korea - where domestic or export prices are alleged to be below fair value. Check current CBIC anti-dumping notifications at the time of each consignment.

How to Import Petrochemicals into India - Step-by-Step Classification Guide

Importing petrochemicals into India requires navigating customs classification, duty applicability, and regulatory compliance. Here is a practical step-by-step guide for filing a Bill of Entry correctly.

Step 1 - Identify the Correct 8-Digit HSN Code

Start with the CBIC tariff schedule. Determine whether your product is Chapter 27 or Chapter 29. Then narrow down to the specific 8-digit sub-code. This is the most consequential decision in the import process - get it wrong and everything downstream is wrong.

Key question: What is the manufacturing origin of this product? Coal-tar distillation versus petrochemical processing is the primary differentiator between 5% IGST and 18% IGST.

Step 2 - Determine Applicable Duty Rates

For the identified HSN code, confirm:

• BCD rate (likely Nil under current notifications)
• SWS rate (10% of BCD - effectively Nil where BCD is Nil)
• IGST rate (5% for Chapter 27, 18% for Chapter 29)
• Whether any specific exemption notification applies to your consignment

Step 3 - Verify DGFT Requirements

Most petrochemical imports fall under Open General Licence (OGL) - no specific import licence required. But:

• IEC (Import Export Code) is mandatory for all commercial imports. Ensure yours is current.
• PESO (Petroleum and Explosives Safety Organisation) registration may be required for hazardous petrochemical compounds.
• Check whether your product falls under the DGFT SCOMET list for restricted chemicals.
• Anti-dumping duty applicability should be verified for imports from China, Korea, and other named countries.

Step 4 - Prepare Documentation

Commercial invoice, packing list, bill of lading, certificate of origin, and Material Safety Data Sheet (MSDS) are standard. For petrochemical imports, the certificate of origin matters more than usual - it may determine whether your product qualifies for Nil BCD under a specific exemption notification.

Step 5 - File the Bill of Entry

File the BoE at the port of import using the correct 8-digit HSN code. Pay applicable IGST based on the chapter. Customs will verify the HSN classification at filing - an incorrect code triggers re-assessment.

Step 6 - Post-Clearance Compliance

Retain all import documentation for a minimum of 5 years. If you claimed Nil BCD under an exemption notification, ensure your end-use matches the conditions of that exemption - post-clearance audits can verify this.

Eximoz automates the HSN classification process end-to-end: from product description input to the correct 8-digit HSN code, applicable duty rates, and IGST. The system validates against the latest CBIC tariff schedule.

Petrochemical Imports into India - Volume and Major Source Countries

India is among the world's largest petrochemical importers, with annual import values running into $15 billion across the full product chain. Domestic refining capacity has expanded significantly, but a structural gap remains between domestic production and demand - particularly for specialty and performance petrochemical products.

Major Source Countries

India's petrochemical imports are dominated by Middle East suppliers, with GCC countries accounting for the largest share.

• Saudi Arabia - the single largest supplier, with competitive ethane-based feedstock driving exports of ethylene, propylene, and polymers.
• UAE - significant hub for re-exports and petrochemical derivatives, particularly from Abu Dhabi.
• Qatar - major exporter of LPG (HSN 2901.10), polyethylene, and polypropylene.
• Kuwait - petrochemical exports to India include polymers and aromatics.
• South Korea - key supplier of higher-value petrochemical derivatives and specialty chemicals.

China occupies a significant share of India's petrochemical imports but is subject to anti-dumping duties on multiple product lines, making South Korean and Middle Eastern suppliers comparatively more cost-competitive at the duty-adjusted rate.

Import Trends

India's import dependence on petrochemicals is expected to grow through 2030 as downstream manufacturing capacity - particularly in packaging, automotive, and infrastructure - expands faster than domestic petrochemical production. This makes correct HSN classification even more consequential: at scale, even small percentage differences in IGST translate into significant duty over- or under-payment.

GST on Petrochemicals - HSN-Wise Rates (Updated 2026)

The GST treatment of petrochemicals is one of the most misunderstood aspects of importing these products. While IGST applies to all petrochemical imports - they are not on the GST Council's exemption list - the rate varies significantly by chapter, and this variation is the source of most classification errors.

Chapter 27 - 5% IGST

Chapter 27 covers petroleum oils, coal-tar distillation products, and related substances. The 5% IGST rate applies to fuel-grade and solvent-grade petrochemicals sourced from petroleum refining or coal-tar distillation.

Chapter 29 - 18% IGST

Chapter 29 covers organic chemicals including all major petrochemical aromatics, alcohols, and polymers. The 18% rate applies to the full range of chemical compounds manufactured through petrochemical processes - benzene, toluene, xylene, styrene, ethylene glycol, and polymers included.

The Chapter 27 vs Chapter 29 Distinction

This split is not arbitrary - it reflects manufacturing process and feedstock origin. But in practice it creates a real-world classification challenge: the same chemical compound can legitimately fall under either chapter depending on its source. Benzene from coal tar (2707.10, 5% IGST) versus benzene from ethylene production (2902.20, 18% IGST).

Most commercial imports of benzene, toluene, and xylene are petrochemical-source - they fall under Chapter 29 and attract 18% IGST. Importers who assume these products fall under Chapter 27 based on their chemical name, without verifying source, will systematically under-pay IGST and face customs demands at clearance or during post-audit.

IGST and Input Tax Credit

For registered businesses, IGST paid on petrochemical imports is generally recoverable as input tax credit against output GST liability. However, ITC eligibility depends on the end-use of the imported petrochemical - products used in exempt supplies or in sectors not covered under ITC may not qualify. Businesses should verify ITC eligibility before claiming.

Petrochemical HSN Classification - Common Mistakes to Avoid

Classification errors on petrochemical imports are common enough that customs authorities have published specific advisory circulars on the subject.

Mistake 1 - Assuming All Aromatics Attract the Same IGST Rate

The Chapter 27 vs Chapter 29 distinction is the single biggest source of IGST errors. Any importer who categorises benzene, toluene, or xylene without confirming the manufacturing source is one digit away from a customs dispute. Coal-tar benzene and petrochemical benzene are both "benzene" - but they carry different HSN codes and different IGST rates.

Mistake 2 - Stopping at the 4-Digit HSN

India's customs tariff operates at the 8-digit sub-classification level. Using a 4-digit HSN code (e.g., "2902" for cyclic aromatic hydrocarbons) when an 8-digit code (e.g., "2902.20" for benzene) is required results in an invalid BoE filing. Customs systems at major ports now validate 8-digit codes - a 4-digit entry gets rejected.

Mistake 3 - Ignoring the Source of Product for Nil BCD Exemption

Many Nil BCD exemption notifications specify feedstock type and end-use conditions. An importer who claims Nil BCD on a consignment that doesn't meet those conditions faces a customs demand for the difference, plus interest, when the consignment is audited. Always verify that your specific consignment qualifies for the exemption notification you are relying on.

Mistake 4 - Not Checking Anti-Dumping Duty Notifications

Anti-dumping duties apply to specific source countries and specific products. The absence of BCD does not mean the absence of all customs liability. China-origin styrene and certain Korean polymers have active anti-dumping duties. Failing to account for these results in an incorrect cost calculation and potential customs liability at clearance.

Mistake 5 - Conflating Naphtha with Motor Spirit

Naphtha (HSN 2710.11) and motor spirit (HSN 2710.12) are both petroleum oils but carry different duty treatments. Confusing the two is a serious classification error regardless of direction. Naphtha is duty-exempt as a petrochemical feedstock; motor spirit is not. Verify the specific 8-digit sub-code before filing.

Mistake 6 - Not Updating for 2026 Budget Amendments

India's customs tariff is updated annually with the Union Budget and through periodic CBIC circulars. Duty rates accurate in 2024 may have changed in 2025 or 2026. Always verify against the latest CBIC tariff schedule, not a cached web page or an outdated blog post.

Frequently Asked Questions

What is the HSN code for benzene in India?

Benzene in India has two possible HSN codes depending on its source. Coal-tar distillation: HSN 2707.10, 5% IGST. Petrochemical processes: HSN 2902.20, 18% IGST. Importers must verify the chemical origin of the benzene to determine the correct HSN code and applicable GST rate. Confirm the correct 8-digit sub-code with CBIC tariff before filing your Bill of Entry.

What is the HSN code for toluene in India?

Toluene is classified under HSN 2707.20 when derived from coal-tar distillation (5% IGST) and under HSN 2902.30 when derived from petrochemical processes (18% IGST). The classification hinges on manufacturing origin. Using the wrong HSN code results in incorrect duty calculation and potential customs penalties.

What is the HSN code for xylene (ortho, meta, para) in India?

The three xylene isomers carry specific HSN codes: o-Xylene is HSN 2902.41, m-Xylene is HSN 2902.42, and p-Xylene is HSN 2902.43. Mixed xylene (isomer mixture) is HSN 2902.44. All xylene isomers attract Nil BCD and 18% IGST under Chapter 29. These codes matter for importers of aromatic solvents and manufacturers in the polyester and PTA supply chains.

What is the HSN code for naphtha in India?

Naphtha used as a petrochemical feedstock is HSN 2710.11, with Nil BCD and 5% IGST. This code covers light petroleum oils from petroleum refining. Naphtha is a key feedstock for India's domestic petrochemical plants and is imported duty-free under current customs exemptions. Do not confuse naphtha (2710.11) with motor spirit (2710.12), which has a different duty treatment.

Are petrochemical imports into India subject to customs duty?

Most petrochemical feedstocks imported into India carry Nil Basic Customs Duty under current customs exemption notifications. This policy has been in place since 2022 to support domestic manufacturing competitiveness against Middle East and ASEAN producers. Note that Social Welfare Surcharge (10% of BCD) means total customs duty is effectively zero wherever BCD is Nil. Applicable IGST (5% or 18%) must still be paid based on the HSN chapter.

How is IGST applied on petrochemical imports into India?

IGST on petrochemical imports is not uniform - it depends on the HSN chapter. Chapter 27 products (HSN 2707-2711) attract 5% IGST. Chapter 29 products (HSN 2901-2942) attract 18% IGST. This distinction is missed by most import guidance. Importers must determine whether their product falls under Chapter 27 or Chapter 29 based on chemical composition and manufacturing origin, not just the common name.

How do I file a Bill of Entry for petrochemical imports in India?

To file a Bill of Entry for petrochemical imports: first identify the correct 8-digit HSN code from the CBIC tariff schedule. Confirm applicable BCD, SWS, and IGST for that specific code. Check whether any exemption notification applies to your consignment. File the Bill of Entry at the port of import using the correct HSN, and pay the applicable IGST based on whether the product falls under Chapter 27 (5%) or Chapter 29 (18%). Eximoz automates this classification process and validates HSN codes against the latest CBIC tariff schedule.

Need help with correct HSN classification, duty calculation, and IGST applicability for petrochemical imports? Eximoz automates BOE classification, validates HSN codes against the latest CBIC tariff schedule, and flags the correct IGST rate (5% or 18%) based on your product's chapter. Classification in minutes, not hours.

Author: Riya | Eximoz Blog Researcher