GST Reform 2.0 has brought significant changes to the taxation of paper and paperboard products in India. With updated HSN codes and revised tax slabs, businesses involved in packaging, printing, and stationery need to ensure compliance. Key changes include exemptions for legal and government-issued documents, a reduced GST rate of 5% on newsprint, cartons, trays, and paper bags, and an increased rate of 18% for uncoated writing paper. Meanwhile, coated paper, tissue paper, and carbon paper continue to be taxed at 18%. These updates affect pricing, input tax credits, and supply chain operations. It’s essential for manufacturers, distributors, and retailers to correctly classify products under the appropriate HSN codes and apply the correct GST rates to maintain smooth business operations.
New GST Rate and HSN Code for Paper Products
Product Category |
HSN Code |
Previous GST Rate |
New GST Rate (Effective Sept 22, 2025) |
Newsprint (rolls or sheets) |
4801 |
5% |
5% (Unchanged) |
Exercise Books & Notebooks |
4820 |
12% |
0% (Exempt) |
Pulp molded trays, paper bags, cartons, boxes |
4819, 4823 |
12% |
5% |
Uncoated paper for writing and printing |
4802 |
12% |
18% |
Coated paper, tissue paper, carbon paper |
4810, 4809 |
18% |
18% (Unchanged) |
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
Under GST Reform 2.0, several paper product categories have been shifted to the 5% tax slab. This reduction is designed to support the packaging and printing sectors while lowering the cost of essential items.
- Newsprint, whether in rolls or sheets, continues to attract a 5% GST rate.
- Corrugated and non-corrugated boxes, cartons, and pulp-moulded trays have been moved from the 12% to the 5% slab.
- Paper bags and various stationery items have also had their GST rates reduced to 5%.
Paper Products Taxable at 18% GST Rate
The 18% GST rate applies to most processed or value-added paper products, including a significant category that experienced a rate hike.
- Uncoated paper and paperboard used for writing and printing (the raw materials for notebooks and books) have been shifted from the 12% to the 18% slab.
- Coated paper and paperboard, including kraft paper, continue to be taxed at 18%.
- Carbon paper, tissue paper, and self-copy paper are also taxed at 18%.
- Packaging materials like paperboard and asphaltic roofing sheets fall under the 18% GST rate as well.
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 products requires applying the correct rate based on their updated classification.
Steps to Calculate GST:
- Identify the product along with its appropriate HSN code.
- Apply the relevant GST rate (0%, 5%, or 18%).
- Multiply the product’s cost by the GST rate to find the tax amount.
Example:
- For a batch of uncoated paper priced at Rs. 5,000, now taxed at 18%:
- GST = Rs. 5,000 × 18% = Rs. 900
- Total Price = Rs. 5,000 + Rs. 900 = Rs. 5,900
- For a batch of cartons costing Rs. 5,000, taxed at 5%:
- GST = Rs. 5,000 × 5% = Rs. 250
- Total Price = Rs. 5,000 + Rs. 250 = Rs. 5,250
Use this GST calculator for quick and precise GST calculations.
Conclusion
GST Reform 2.0 has introduced important changes to the taxation framework for the paper industry. It is crucial for manufacturers, wholesalers, and retailers to clearly understand the updated GST rates and HSN codes to maintain smooth operations and comply with regulations. The reclassification of certain paper products into higher or lower tax slabs, along with exemptions for educational materials, will directly affect pricing and supply chain dynamics.
If you’re looking to expand your business or increase inventory, securing a business loan can provide the necessary funds while ensuring your operations remain GST-compliant.