The 45th meeting of the GST council has proposed to increase the GST on corrugated boxes from 12 to 18% on cartons, boxes, packing containers of paper, etc. The council while clarifying this increase has stated that this was done to remove ambiguity and a uniform rate of 18% has been proposed on all paper and paper board container, whether corrugated or non-corrugated.
According to the manufacturers, an increase of 6% in the GST rate of corrugated boxes will have a debilitating effect on the business. They added that GST on corrugated boxes has been 12% since its inception and it was on par with its major raw material — kraft paper and paperboard.
Now, the manufacturers want the state government to take up the matter with the GST council in its next meeting. A representation regarding this was also given to the union finance minister at Panchkula.
The manufacturers contended that they are MSME with a large number of them being micro and small sector enterprises. This increase will hit cash flow in the market. Earlier, 3% cash flow of sales was required but the new development will push it to 9% and no customer will offset this additional cost of finance.