Special Insight : India GST changes – impact on paper sector

The GST effect – Kraft and corrugation businesses face higher costs

23 September 2025

In new rates that became effective on 22nd September 2025, the GST Council of India increased the tax rate on paper and paperboard from 12% to 18%, while pulling the tax on corrugated boxes down to 5%, from 12% earlier. The GST hike on upstream while reduction on downstream creates an inverted GST structure that has put converters under pressure due to higher working capital requirements. Paper manufacturers selling on credit will also need to bear higher working capital costs.