GST Exemption on the Indian National Flag (Tiranga): A Closer Look at the Final Cost

The Tiranga of our nation, is an epitome of national dignity. It perfectly represents the idea of unity, democracy, and sovereignty. It is hoisted with pride by citizens on national holidays such as Republic Day and Independence Day.

To make the flag more accessible, the Government of India exempted it from Goods and Services Tax (GST). The exemption will ensure that economic constraints do not come in the way of patriotic feeling. The article below examines the impact of this action on cost, accessibility, and society.

Understanding GST Exemption on the National Flag

Most commodities fall within the ambit of taxation in the GST regime. National interest and public interest goods, however, have been exempted. The Indian National Flag happens to be one such good.

Exemption has been made applicable to flags as per BIS specifications as well as Flag Code of India. These normally include khadi, cotton, and silk cloth.

Regardless of whether bought online or offline, GST is exempt as long as the flag adheres to these requirements. This offers substantial price stability and promotes lawful adherence.

Important GST Exemption Facts

Aspect	Details
GST Rate	0% (Exempted)
Materials Covered	Hand-woven khadi, cotton, silk (as per Flag Code and BIS norms)
Where Applicable	Across physical shops and online platforms
Conditions for Exemption	Only flags meeting Flag Code and BIS standards are exempt
Sizes Covered	All standard sizes, from handheld to large hoisting flags

New Flag Code of India Revisions

The Government of India overhauled the Flag Code of India, 2002, thoroughly in 2021 and 2022 to enhance substantial availability and respect for the national flag. The Flag Code was amended on December 30, 2021, to permit the use of machine-made and polyester fabric in the national flag. The revised clause now states that the national flag shall be made of hand-spun and hand-woven or machine-made cotton, polyester, wool, silk, or khadi bunting. The amendment was brought to deal with the increased demand for national flags for celebration and festivity.

On top of that, a bill of amendment was moved on July 20, 2022, that facilitated the hoisting of the national flag day and night when it is hoisted in the open or at the domicile of a member of the public. Previously, it could be hoisted between sunrise and sunset. This was done so as to encourage more citizens to participate in the 'Har Ghar Tiranga' campaign and to facilitate its display round the clock easily.

The above changes have made the national flag affordable to all and have invited citizens to fly it with pride, showing a modern touch to the respect for the national symbol.

Suggested: List of GST Exempted Goods

Benefits of GST Exemption on the Indian Flag

Affordable to All: The exemption keeps the final cost of the Tiranga affordable. Individuals from all income classes, especially rural residents, can now buy it without worrying about extra taxes.

Encourages Patriotism: By making the flag cheap, it stimulates higher public participation in national affairs and deeper civic engagement.

Help to Traditional Industries: Indian flags are predominantly produced using khadi. The exemption positively affects khadi artisans and small producers by stimulating demand during peak national celebrations.

Facilitating Sale by Small Traders: Exemption under GST prevents calculation and reporting of tax at the sellers' end. It advantages large numbers of unregistered and seasonal sellers.

Promotes Institutional Buying: Schools, NGOs, and welfare bodies are able to distribute flags without any trouble in bulk without incurring expenses on taxes.

Disadvantages and Challenges

Inadequate Knowledge among Sellers: The majority of the small traders remain ignorant about the GST exemption and still collect tax either due to lack of information or misinformation.

Application of Growth-Restrictive Material: Sale of plastic or polyester material flags is prohibited under the Flag Code. Sale of such inexpensive, illegal flags in bulk can be the result of GST exemption if not monitored.

Enforcement Difficulty: Compliance of size, material, and make specifications by all suppliers proves to be difficult for the authorities.

Limited Sales: Sales of flags are extremely seasonal, since they are limited mainly to national holidays. Hence, the financial benefits of the GST exemption cannot possibly significantly accrue to suppliers for most of the year.

Risk of Over-commercialization: Increased sales may lead to abuse or disrespect of the flag, especially if buyers know nothing about standards of appropriate usage under the Flag Code.

Conclusion

Excluding the Indian National Flag under GST is a prudent policy decision weighing national sentiments against greater affordability. The step benefits consumers, artisans, and small traders alike. But it also requires greater sensitivities and compliances to maintain dignity to the flag. Assuming it is being done in a proper manner, this exemption can actually enhance civic pride without compromising on legal or ethical fronts.

Suggested Read: GST Exemption on Educational Course Fees

FAQs

1. Whether GST is payable on Tiranga if it is offered for sale in a gift shop?

No, GST is not payable on the Indian National Flag, if it is being sold as part of a school kit or a package, or otherwise, if it conforms to the standards of the Flag Code.