New GST on Packaging Materials: Tax Implication Across Industries
- Packaging materials like cardboard, plastic, and metal are taxed under GST, with rates ranging from 5% to 18%.
- Paper and cardboard boxes have a GST rate of 5%, while plastic, metal, and glass packaging are taxed at 18%.
- Businesses can claim Input Tax Credit (ITC) on GST paid for packaging if it's used for business and proper invoices are filed.
- Different industries, such as food, pharma, and e-commerce, face varying GST impacts but benefit from ITC to control costs.
- Correct HSN codes must be used for GST billing, ensuring compliance and taking advantage of tax credits.
Packaging plays a vital role in almost every industry, from FMCG and pharmaceuticals to electronics and exports. Whether it’s cardboard boxes, plastic wraps, bottles, or tin containers, packaging materials are a key part of production and supply chains. But how are these materials taxed under GST ? In this blog, we break down the GST on packaging materials, applicable HSN codes , input tax credit rules, and how the tax affects manufacturers and traders across sectors.
Experience the power of Expert Accounting
Join our guided walkthrough to see how BUSY can transform your business operations.
New GST Rate on Common Packaging Materials
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for common Packaging Materials (no compensation cess).
| Type of Packaging Material | GST Rate | Examples |
|---|---|---|
| Paper & Cardboard Boxes | 5% | Corrugated boxes, folding cartons |
| Plastic Packaging (wraps, bags) | 18% | Shrink wrap, plastic pouches |
| Metal Packaging (cans, tins) | 18% | Tin containers, aluminum foil |
| Glass Bottles & Jars | 18% | Used in food & pharma |
| Wooden Crates & Boxes | 5% | Used for heavy machinery & transport |
| Thermocol Packaging | 18% | Electronics and fragile items |
| Textile-Based Sacks or Bags | 5% | Jute bags, woven sacks |
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Are Packaging Materials Taxable Under GST?
Yes, all kinds of packaging materials are taxable under GST. These materials are considered essential inputs or capital goods depending on their use. The GST rate varies depending on the type of material, such as paper, plastic, glass, or metal.
Old GST Rate on Common Packaging Materials
(Old GST Rates – Applicable Until 21st September)
| Type of Packaging Material | GST Rate | Examples |
|---|---|---|
| Paper & Cardboard Boxes | 12% | Corrugated boxes, folding cartons |
| Plastic Packaging (wraps, bags) | 18% | Shrink wrap, plastic pouches |
| Metal Packaging (cans, tins) | 18% | Tin containers, aluminum foil |
| Glass Bottles & Jars | 18% | Used in food & pharma |
| Wooden Crates & Boxes | 12% | Used for heavy machinery & transport |
| Thermocol Packaging | 18% | Electronics and fragile items |
| Textile-Based Sacks or Bags | 5% – 12% | Jute bags, woven sacks |
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
Type of Packaging Material
GST Rate
Examples
HSN Codes for Packaging Materials
| Material Type | HSN Code | Old GST Rate |
|---|---|---|
| Paper/Paperboard Boxes | 4819 | 12% |
| Plastic Films/Bags | 3923 | 18% |
| Metal Containers (Tins) | 7310 / 7612 | 18% |
| Glass Containers | 7010 | 18% |
| Jute or Woven Sacks | 6305 | 5% – 12% |
| Wooden Boxes/Crates | 4415 | 12% |
Material Type
HSN Code
Old GST Rate
Material Type
HSN Code
Old GST Rate
Material Type
HSN Code
Old GST Rate
Material Type
HSN Code
Old GST Rate
Material Type
HSN Code
Old GST Rate
Material Type
HSN Code
Old GST Rate
Always apply the correct HSN code for GST billing and compliance.
Input Tax Credit (ITC) on Packaging Materials
Businesses can claim Input Tax Credit on the GST paid for packaging materials, provided:
- The packaging is used for business purposes
- A valid GST invoice is available
- The supplier has filed appropriate GST returns
This is especially relevant in industries like food processing , pharma , e-commerce , and exports.
Industry-Wise GST Impact
1. Food & Beverage Industry
- Uses plastic containers, glass jars, and foil wraps
- Most packaging taxed at 18%
- Eligible for ITC, reducing effective cost
2. Pharmaceutical Industry
- High reliance on glass and plastic packaging
- Uniform 18% GST rate applies
- Packaging is essential for safety and labeling
3. E-commerce & Retail
- Use of corrugated boxes, plastic pouches
- GST on packaging materials affects pricing models
- ITC benefits ensure better margin control
Conclusion
The GST on packaging materials depends on the type and composition of the material used, with rates ranging from 5% to 18%. Businesses should be aware of correct HSN codes and tax slabs to ensure compliance and take advantage of ITC. From food delivery to electronics shipping, packaging plays a critical role, and understanding its tax implications can help control costs and boost profitability across industries.
