Procurement and accounts teams often ask us three GST questions before a first order: what rate applies to biomass pellets and briquettes, how does it compare with coal, and can the tax be claimed back as input credit. This guide sets out what the official notifications say, and where you should confirm details with your tax advisor. The position below is as of October 2026; GST rates and notifications change, so always confirm with the issuing authority.
What Changed on 22 September 2025
The 56th GST Council meeting (September 2025) recommended removing the compensation cess on coal (₹400 per tonne) and raising GST on coal (HSN 2701) from 5% to 18%. The Ministry of Coal confirmed the change through the Press Information Bureau, and the revised structure took effect on 22 September 2025. For a plant that buys both coal and biomass fuel, this changes the tax comparison between the two fuels.
Rate for Biomass Briquettes and Solid Bio-fuel Pellets
As of October 2026, biomass briquettes and solid bio-fuel pellets are listed at 5% GST (Notification 9/2025-Central Tax (Rate), Schedule I, S.No. 516, in force from 22 September 2025; this entry dates back to the 2017/2018 rate cuts), and coal is at 18% with the ₹400 per tonne compensation cess ended. The notification lists “biomass briquettes or solid bio fuel pellets” in Schedule I (2.5% CGST plus 2.5% SGST, which is 5% GST in total) at serial number 516, under the heading “any chapter”. Wood in chips or particles, sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes or pellets (HSN 4401), is also listed at 5% in the same schedule.
| Item | GST treatment as per the notification |
|---|---|
| Biomass briquettes or solid bio-fuel pellets | 5% (Schedule I, S.No. 516) |
| Wood waste, sawdust, wood pellets and briquettes (HSN 4401) | 5% (Schedule I) |
| Firewood or fuel wood (4401), wood charcoal (4402), unprepared cereal straw and husks (1213) | Nil rated |
| Coal (HSN 2701) | 18% from 22 September 2025; the ₹400 per tonne compensation cess ended |
Two points are worth stating clearly. Biomass briquettes and pellets are not exempt from GST; they are taxed at 5%. And because the biomass entry is worded “any chapter”, you should not assume that every agro-residue pellet or briquette is classified under a single HSN code. Wood pellets sit under HSN 4401 31. For agro-residue products, check the classification printed on your supplier’s invoice with your tax advisor.
Always confirm current rates on the CBIC GST rate schedule or with your tax advisor before you finalise a budget or contract.
The 57th GST Council meeting (8 October 2026) recommended process reforms only, with no rate change for biomass fuels or coal, according to the Council’s official press release. Rates can change, so confirm on the CBIC GST rate schedule or with your tax advisor.
What This Means for Fuel Cost Comparison
When you compare fuels, use the delivered price including GST, and then ask whether your business can take input tax credit. If it can, the GST component is neutral for your cash cost, and the comparison should be made on the price before tax. If your unit cannot claim credit, the 5% on biomass against 18% on coal is a real difference in cost per million Kcal, and it belongs in the calculation. Our fuel cost calculator lets you enter your own delivered prices.
Input Tax Credit: The Basics
Under Section 16 of the CGST Act, a registered person can generally claim input tax credit on goods used in the course or furtherance of business, subject to conditions. In outline, you need:
- A valid tax invoice or debit note from a registered supplier
- Receipt of the goods
- The tax actually paid to the government by the supplier, which in practice is checked through the credit appearing in your GSTR-2B
- Your own return filed
Some credits are blocked or restricted under Section 17(5) and related rules, and eligibility depends on how the fuel is used in your business. Because this is a matter of your own tax position, take advice from your tax consultant rather than relying on a general guide.
Invoices, GSTIN and E-way Bills
Every supply from Bharat Bio Industries is made against a tax invoice that carries our GSTIN, 24ABGFB9077M1ZX, the description and classification of the goods, and the applicable tax. For consignments above the prescribed value limit (generally ₹50,000), an e-way bill is required for movement of goods, and you should check the current rules for your state. Matching the invoice against your GSTR-2B each month avoids credit mismatches.
Questions Buyers Ask
Is GST on briquettes and pellets lower than on coal?
According to the notifications described above, biomass briquettes and solid bio-fuel pellets are listed at 5%, and coal is at 18% from 22 September 2025. Confirm on the CBIC rate schedule before you rely on this.
Are wood pellets treated differently from agro pellets?
Wood pellets fall under HSN 4401 31. Agro-residue pellets and briquettes may be classified differently, so check the classification on the invoice with your tax advisor.
Is firewood or straw taxed the same way?
No. Firewood or fuel wood, wood charcoal and unprepared cereal straw and husks are nil rated, but they are unprocessed fuels with very different handling and combustion characteristics from pressed briquettes or pellets.
What is the minimum order?
The minimum order quantity is 25 MT. Standard contracts are 50 MT per month and large-volume contracts start at 200 MT per month.
To request a quote or a sample invoice format for your accounts team, contact our team.
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