HSN Code 21069020

Why this sits outside the general food-preparation rate

Pan masala (HSN 2106 90 20) is specifically carved out of the general "food preparations not elsewhere specified" heading (HSN 2106, which is otherwise 5%) and taxed separately at 28% — the highest standard GST slab. This carve-out exists precisely so pan masala isn't taxed at the same rate as ordinary packaged food preparations.

Sellers occasionally file pan masala under the general 2106 food-preparation code by mistake, since it sits in the same chapter — always use the specific 2106 90 20 sub-heading for pan masala rather than the parent 2106 entry. Note that products in this category commonly attract Compensation Cess in addition to GST — confirm current cess applicability for your specific product on the official CBIC portal, since cess rates and structures are revised more frequently than base GST rates.