Packaging Under SAC Code 998540

SAC 998540 covers packaging services performed on goods that belong to another party. Typical examples include carton packing, retail ready packaging, blister and pouch packing, stickering and barcoding, promotional combo packing and festive gift wrapping. Only the service element is billed under this code. The value of goods and packing materials is included or excluded based on the commercial terms agreed between the service provider and the client.

These packaging services generally fall under the standard GST rate of 18%. There was no change in this rate in the September 2025 GST restructuring. Where the packed goods are later supplied as taxable outward supplies, the recipient can usually claim input tax credit on GST paid for packaging services, subject to normal eligibility conditions.

The table below highlights the latest GST rate notified for SAC code 998540.

While raising invoices for contract packaging work, service providers should use SAC code 998540 with 18% GST, and clearly mention whether materials are included or billed separately so that clients can capitalise or expense the cost correctly in their accounts and GST returns.

Packaging services of goods for others under SAC 998540 help manufacturers, traders and online sellers manage their packing operations flexibly through outsourced service providers. The applicable GST rate is 18%, and tax paid is usually available as input tax credit when the packed goods are sold as taxable supplies. By using this SAC code properly and stating the scope of work clearly on invoices, businesses can link packaging costs with their sales and maintain strong GST compliance.