Packing Charges HSN Code and GST Rate
Packing charges are common in trade and services. Businesses often charge for cartons, wrapping, strapping and handling when they send goods to customers. These charges may appear as a separate line on the invoice or may be included in the price of the goods.
To use the packing charges HSN code correctly and avoid mistakes in GST returns, traders, manufacturers and logistics providers need to understand how packing and forwarding charges are classified under GST and which GST rates generally apply after the changes from 22 September 2025.
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What is the HSN Code for Packing and Forwarding?
Under GST, packing and forwarding can be treated either as part of the value of the goods or as a separate service. In many cases, packing charges are naturally bundled with the supply of goods and are considered part of a single composite supply . In such cases they follow the HSN code and GST rate of the main goods.
When a business provides an independent packing service such as job work packing or specialised export packing it is treated as a service. In that case the HSN concept is applied through service accounting codes that start with ninety nine and the supply is normally taxed as a standard rate service.
Packing Charges SAC Code Classification and GST Rates
Here are some commonly used HSN codes and GST rates for this category
4 Digit SAC Code Classification
6 Digit SAC Code Classification
| HSN/SAC Code | HSN/SAC Code Title | GST Rate |
|---|---|---|
| 998540 | Packaging services of goods for others | 18% |
| 998541 | Parcel packing and gift wrapping | 18% |
| 998542 | Coin and currency packing services | 18% |
| 998549 | Other packaging services n.e.c. | 18% |
* GST rates may vary based on the latest GST notifications and amendments
How to Classify Packing Charges HSN Code in GST?
The first step is to see whether the packing charges are incidental to the sale of goods. If the seller uses cartons and wrapping only to supply those goods and charges the buyer for this as part of the same contract then the packing charges form part of the value of the goods. In this case the HSN code for the goods is used and packing is not given a separate HSN code.
If a business is hired only to pack goods that belong to another party, for example a job worker who carries out export packing, they are providing a service that is separate from the goods themselves. Such a service is classified under an appropriate service accounting family such as packaging services or other business support services and is usually taxed at the standard service rate.
Where a transporter charges packing and handling at the time of booking goods, such charges are tied to the transport service . They then follow the classification and GST rate of the transport or logistics service subject to the usual conditions for goods transport.
GST Rates for Packing Charges and HSN Code
Under the three slab GST structure that applies from 22 September 2025, most services including packing and related support services remain in the standard 18% slab. Only a limited group of essential services is fully exempt and only a narrow group of sin or luxury items is placed in the 40% slab.
When packing is part of the value of goods, the GST rate on packing charges is the same as the rate on the goods. For example if machinery is taxed at 18%, any packing charges recovered from the buyer for crates and boxes will also suffer 18% because they form part of the value of the machinery. If the goods are taxed at 5%, the packing embedded in the value also suffers 5%.
Where a business raises a separate invoice for an independent packing service, that service is usually taxed at 18% under the chosen service accounting code. The invoice mentions the service description, the service code, the taxable value and the GST amount so that the customer can claim input tax credit if eligible.
If there is doubt whether packing should follow the goods or be billed as a service, businesses should look at the real nature of the contract. If the customer mainly wants goods and packing is only a normal part of supplying those goods it is safer to treat it as part of the goods. The rate may vary depending on specific notifications and conditions so it is important to check the latest position for unusual cases.
Conclusion
The packing charges HSN code in GST depends on whether the charges are part of a composite supply of goods or represent an independent packing service. When they are incidental to the sale of goods they take the HSN code and GST rate of the main goods. When they are billed as a separate service they are classified under suitable service accounting families and usually attract 18% GST.
By identifying the correct nature of packing and forwarding, mapping it to the appropriate goods HSN or service code and applying the correct GST rate in invoices and returns, businesses can keep their pricing clear, support smooth input tax credit for customers and avoid disputes over wrong classification of packing charges.
