Understanding the correct HSN code is essential for determining the applicable GST rate. Paper and paperboard products are classified under Chapter 48 of the HSN system.
- HSN Codes for paper products typically fall between 4801 to 4823.
- Items such as newsprint, uncoated paper, coated paper, and paperboard have specific codes.
- Different GST rates apply based on product classification under HSN codes.
Paper Products Not Taxable under GST
Certain paper-related items are fully exempt from GST. These are usually regulatory or legal documents not treated as commercial goods.
- Judicial and non-judicial stamp papers.
- Court fee stamps when sold by the government.
- Indian currency notes and postal items like envelopes and postcards issued by the government.
These exemptions reflect their non-commercial utility and administrative nature.
Paper Products Taxable at 5% GST Rate
Only a limited category of paper products is taxed at 5% GST:
- Newsprint in rolls or sheets qualifies for the 5% GST rate.
- This lower tax bracket aims to support the print and publishing industry.
Paper Products Taxable at 12% GST Rate
Some commonly used paper types attract a 12% GST rate:
- Uncoated paper and paperboard for writing, printing, or similar purposes.
- Paper used for producing books, printing paper, or exercise books.
- Filter paper and specific industrial-grade papers.
Check your business loan eligibility to manage working capital requirements when dealing with taxed raw materials or bulk orders.
Paper Products Taxable at 18% GST Rate
The 18% GST rate is applicable to more processed or value-added paper products.
Key Pointers:
- Coated paper and paperboard (including kraft paper).
- Carbon paper, tissue paper, self-copy paper.
- Cartons, boxes, packaging materials.
- Pulp moulded trays and asphaltic roofing sheets.
This category includes most packaging and industrial paper applications.
How is GST Applicable to Paper?
GST applicability on paper depends on the product's nature, classification, and use. Businesses dealing in paper products must ensure compliance based on HSN classification.
Key Pointers:
- Proper HSN classification is mandatory for accurate GST application.
- Manufacturers, distributors, and retailers need to charge the appropriate GST rate at each supply stage.
- Businesses can claim Input Tax Credit (ITC) on GST paid during purchases.
How is GST Calculated on Paper?
Calculating GST on paper involves applying the correct percentage based on classification.
Steps to Calculate GST:
- Identify the product and its correct HSN code.
- Apply the applicable GST rate (5%, 12%, or 18%).
- Multiply the product cost by the GST rate to compute the tax amount.
Example:
If coated paperboard costs Rs. 5,000 and falls under the 18% bracket:
GST = Rs. 5,000 × 18% = Rs. 900
Total Price = Rs. 5,000 + Rs. 900 = Rs. 5,900
Use this GST Calculator for quick and accurate GST computation.
Conclusion
A clear understanding of the applicable GST rate and HSN code for paper helps ensure smooth operations and regulatory compliance in the paper industry. Whether you are a manufacturer, wholesaler, or retailer, proper tax classification supports accurate billing and eligibility for tax credits.
If you're planning to scale your operations or invest in inventory, a business loan can help fund your growth while staying GST-compliant.