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

GST rate on paper and biodegradable carry bags (HSN 4819) vs plastic carry bags (HSN 3923) upheld by classification. Paper sacks, bags and bio-degradable bags classifiable under Chapters 39 or 48, including paper bags predominantly made of paper and classifiable under HSN 4819, are prescribed as taxable at 5% (2.5% CGST) under Sr. No. 319 of Schedule I of Notification No. 9/2025-Central Tax (Rate), and classification is determined by material composition rather than end-use, so use as carry/packing bags does not shift the rate. Plastic carry bags classifiable under HSN 3923 fall under the 18% rate in Schedule III, with the consequence that 18% applies only where the goods are classifiable as plastic bags and not where the product is a paper bag under HSN 4819.