GST Disparity Endangers Future of India’s Corrugated Box Sector

New Delhi: The recent increase in Goods and Services Tax (GST) rates on corrugated boxes has sparked widespread concern across the packaging industry, with manufacturers warning that the move could push many units toward closure. Industry representatives are now calling for urgent government intervention, even hinting at a nationwide strike if corrective measures are not taken immediately. 

Corrugated boxes, widely used for packaging in sectors ranging from food and pharmaceuticals to e-commerce and consumer goods, form the backbone of India’s logistics and supply chain. The hike in GST has, however, created a sharp rise in production costs at a time when manufacturers are already grappling with higher raw material prices and shrinking margins. 

According to industry associations, small and medium-scale units, which form the bulk of corrugated box manufacturing in India, are the worst hit. “This increase in GST has made operations unviable. Many factories are staring at shutdowns as they cannot pass on the burden to clients who are already cost-sensitive,” said an industry spokesperson. 

Manufacturers argue that the hike will not only cripple their businesses but also create a ripple effect on industries dependent on affordable packaging. Sectors like agriculture, FMCG, pharmaceuticals, and e-commerce could face higher packaging costs, which may eventually be passed on to consumers. 

In an exclusive interview with Yash Nanda who is a corrugated box manufacturer, said, “We are deeply distressed by the recent hike in GST on corrugated boxes. This decision is nothing short of an injustice to thousands of small and medium manufacturers across the country. Our industry runs on thin margins, and this sudden increase will block our working capital, push us into a financial crisis, and leave many units at the risk of permanent closure. 

The corrugated box industry is not just about packaging-it supports lakhs of workers and sustains critical supply chains for agriculture, FMCG, pharmaceuticals, e-commerce, and countless other sectors. By raising GST, the government has effectively put an additional burden on an industry that already struggles with high input costs and delayed payments. 

This policy will trap our capital, reduce our ability to survive in a competitive market, and endanger the livelihood of thousands of families. We view this as unfair and unacceptable. 

We demand that the government urgently reconsider and roll back the GST hike. If corrective action is not taken immediately, manufacturers across the country will have no choice but to launch a united strike. We cannot allow our businesses and workers to suffer due to such unjust taxation.” 

“The government must act swiftly to reconsider the GST rates. If not, thousands of workers will lose their livelihoods and critical supply chains will be disrupted,” warned another industry leader. 

With the packaging industry employing lakhs of workers directly and indirectly, the threat of closures poses not only an economic but also a social challenge. Manufacturers have urged the Finance Ministry to open dialogue before the situation escalates further. 

As the strike call gains momentum, all eyes are now on the government to address industry concerns and prevent a potential breakdown in the packaging ecosystem that underpins much of India’s economy.