GST Reduction Proposal Could Strengthen India’s Corrugated Packaging Sector
The Bharat Chamber of Commerce (BCC) has called for a reduction in the Goods and Services Tax (GST) on paper and paperboard used in the production of corrugated cartons, boxes and cases from 18% to 5%, aiming to strengthen India’s packaging industry and address tax-related challenges faced by manufacturers.
In a letter dated June 30, BCC President Naresh Pachisia urged the West Bengal government to raise the issue during the upcoming 57th GST Council meeting, scheduled to be held in Kolkata later this month.
According to the chamber, key raw materials used in paper manufacturing, including wood pulp, currently attract 5% GST, while finished paper and paperboard products are taxed at 18%. This has created an inverted duty structure, placing additional financial pressure on manufacturers. Reducing GST on paper and paperboard would help correct this imbalance and improve working capital availability across the sector.
BCC highlighted the crucial role of the packaging industry in supporting supply chains across agriculture, food processing, pharmaceuticals, FMCG, engineering and e-commerce sectors. The chamber believes a lower GST rate would enhance the competitiveness of India’s packaging industry, particularly benefiting MSMEs, while reducing embedded tax costs and supporting employment generation and exports.
The industry body said the proposed tax rationalisation could provide a significant boost to the corrugated packaging sector by improving liquidity and creating a more favourable business environment for manufacturers.
