GST Rate on Paper bag as per Notification 9/2025

[RAMNIRANJAN KANDOI]

As per the NOTIFICATION NO. 9/2025-Central Tax (Rate) New Delhi, the 17th September, 2025, there is an entry under under Schedule I -2.5% for Paper Bag at Sr. No 319. CH 39, 48 Paper Sacks/Bags and bio-degradable bags. 

There is a confusion in the market that the GST rate for Papar Bag is 18%. Can you pls confirm when 5% is applicable and when 18% to be applied.

If 18% is to be charged then what would would be the entry no. from the said Notification.

[Ryan Vaz]

• Paper bags made predominantly of paper (HSN 4819) are taxable at 5% GST under Sr. No. 319 of Schedule I.

• Plastic carry bags (HSN 3923) are taxable at 18% GST under Schedule III (18%).

• Paper bags do NOT attract 18% GST merely because they are used for packing or carrying goods.

Raj Packaging Industries – AAR Gujarat (2020)

Citation: 2020 (34) G.S.T.L. 513 (AAR-GST)

Held:

• Paper bags made from kraft paper are classifiable under HSN 4819

• GST rate applicable is 5%

• Usage as carry bags does not change classification

?? Key observation:

“Material composition is decisive, not end-use.”

M/s Umiya Paper Bags – AAR Gujarat (2021)

Citation: GUJ/GAAR/R/2021/24

Held:

• Paper bags including grocery and shopping bags are HSN 4819

• GST rate 5% applicable

• Market confusion due to plastic bag rate is misplaced

AI Summary

Paper bags classified by material: paper bags taxed at lower rate; plastic carry bags taxed at 18%; material, not use, controls. Paper and plastic carry bags are taxed according to material-based classification: paper bags are classifiable as paper products and taxed at the lower concessional rate listed for paper bags in the notification, while plastic carry bags are classifiable separately and taxed at 18%; end-use as a carry or packing bag does not change classification.