GST on Corporate Gifts in India: HSN Codes, Rates and the Kit Question — a Buyer's Guide
Why two gifting quotes show different GST lines, what changed under GST 2.0, which gift categories land at 5% vs 18%, and why a kit is taxed as a mixed supply — a procurement-side orientation, not tax advice.
- Published:
- 27 August 2026
If you've compared two corporate gifting quotes and wondered why the GST lines don't match, this guide is for you. Gift items span a dozen tax classifications, kits combine them, and India's GST structure changed substantially in September 2025 — so a lot of what the internet (and some vendors) will tell you is simply out of date.
This is a buyer's orientation, not tax advice: it explains what the codes and rates on your gifting invoice mean, what changed under GST 2.0, and which questions belong to your CA.
Rates and entries referenced below follow the structure in force since 22 September 2025 (Notification 9/2025-Central Tax (Rate)). Tax positions depend on facts and change with notifications — always confirm treatment with your CA before filing anything.
First: what an HSN code is, and why it's on your invoice
Every product on a GST invoice carries an HSN code — the Harmonized System of Nomenclature number that classifies what the item is (a cotton t-shirt, a ceramic mug, a leather wallet). The HSN determines the GST rate. Registered businesses above the turnover threshold must print at least 6-digit HSNs on invoices, and in specific cases the full 8-digit code is what proves a concessional rate applies. If a vendor's invoice shows no HSN, or a 4-digit stub, that's a compliance smell worth questioning.
What changed in September 2025 (and why old rate cards are wrong)
GST 2.0 restructured the goods slabs: for the product categories that matter in gifting, the 12% and 28% slabs were abolished, and most previously-12% items moved down to 5%. The practical result for gifting budgets: goods now fall overwhelmingly into just two rates — 5% and 18%.
The corollary: any quote, blog or rate card still quoting 12% GST on notebooks or gift boxes predates September 2025. Treat it as a freshness test for the vendor.
Common gift categories: where they typically land
Indicative classification for frequently gifted items, as applied in our own catalogue (each product page carries its specific HSN):
Typically 5%:
- Cotton t-shirts and apparel (Chapters 61/62) — 5% provided the sale value is ≤ ₹2,500 per piece; costlier garments are taxed higher. This price condition is why premium apparel quotes sometimes carry a different rate.
- Ceramic mugs and tableware (6912)
- Paper gift boxes and cartons (4819)
- Cotton and jute tote bags — at the specific 8-digit tariff items covering handbags/shopping bags of cotton or jute. (This is the classic case where the full 8-digit code protects the 5% rate — truncated to 6 digits, the entry becomes indistinguishable from 18% laptop sleeves.)
- Candles (3406), chocolates (1806), biscuits/cookies (1905) — the gourmet-hamper staples
Typically 18% (the residual rate):
- Insulated flasks and vacuum bottles (9617) — insulation is the dividing line that separates these from ordinary steel household articles
- Leather and PU goods — wallets, laptop bags, travel organisers (4202)
- Pens (9608), diaries, registers and folders (4820), printed cards and matter (4911)
- Electronics — power banks, chargers, speakers (Chapter 85)
- Plastic articles (Chapter 39)
Two takeaways for budgeting: an eco/cotton-heavy kit attracts visibly less GST than a leather-and-electronics kit of the same base price; and apparel keeps its 5%…
The kit question: what rate applies to a gift box?
A welcome box is several items — a 5% notebook, an 18% pen, an 18% flask — sold as one. GST treats a single-price bundle of unrelated items as a mixed supply, taxed at the highest rate among its components, which for most kits means 18% on the whole box. This is why a kit's invoice rate can exceed the average of its parts, and it's a structuring question worth raising with your CA — how the kit is composed, priced and invoiced can legitimately change the outcome. Browse how ready-made kits are structured in our gift set combos and welcome swag packs.
Input tax credit: the question that belongs to your CA
Whether your company can claim ITC on gifting spends is genuinely nuanced: the GST law restricts credit on goods "disposed of by way of gift", while promotional and branding expenditures raise their own arguments. The right treatment depends on what you bought, for whom, and how it's documented. Do not take a vendor's word for it in either direction — ours included. Take the invoices to your CA; the only thing a good vendor owes you here is a clean, correctly classified GST invoice that gives your CA something defensible to work with.
A buyer's GST checklist for gifting orders
1. Prices ex-GST? Catalogue prices (including ours) are typically quoted exclusive of GST — budget with the rate added.
2. HSN on every line? 6 digits minimum; 8 where the concession demands it.
3. Rates current? Anyone quoting 12% on goods is reading a pre-Sept-2025 card.
4. Kit rate explained? If the box is billed at 18%, the vendor should be able to say "mixed supply, highest component" without hesitation.
5. Apparel price cap respected? Premium garments above ₹2,500/piece don't get the 5% rate.
6. GSTIN and invoice format — standard checks your accounts team already runs.
Frequently asked questions
Why do two vendors quote different GST on the same product?
Usually classification: one has the correct HSN, one doesn't. Occasionally it's the apparel price cap or a kit billed as mixed supply vs itemised. Ask both for the HSN — the code settles the argument.
Is GST charged on the branding/printing charge too?
Customisation is part of the taxable value of what you're buying, so the applicable rate applies to the landed price. How it's itemised varies — another line-level detail your invoice should make explicit rather than bury.
Do gift budgets under ₹500 or ₹1,000 include GST?
Per-head budget planning is usually done ex-GST. Our under ₹500, under ₹1,000 and under ₹2,000 collections follow catalogue pricing — add the applicable rate for your all-in cost.
Where can I verify a rate myself?
The CBIC's official tax-information portal is the primary source; most third-party GST rate sites lag notifications badly. For anything material, your CA reads the notification — that's the system working as intended.
This article explains classification concepts for procurement teams and is not tax, legal or professional advice. Confirm all treatments with your Chartered Accountant.