AUGUST 13, 2025

GST - The Tiranga Exempted: Flag Beyond Tax

By Vijay Kumar

OF all the things that might attract GST in India, the national flag isn't one. Yes, you read that right-patriotism still comes tax-free.

As Independence Day approaches, the flag begins its annual migration-from dusty storerooms to dashboards, balconies, and WhatsApp statuses. It flutters in the wind, adorns avatars, and even sneaks into cake designs. But amidst this patriotic fervor, a curious question often arises:

Is the Indian flag taxable under GST?

Let's unfurl the answer.

Luckily, the Indian National Flag is exempted from GST by Notification No. 2/2017 Central Tax (Rate); Dated: June 28, 2017.

The Notification reads as:

In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Schedule appended to this notification, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedule, from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017).

Schedule

Without the legalese, it means that the Indian National Flag is exempt from GST.

What was the position before the dawn of GST in 2017?

The Indian National Flag was excisable, but thankfully it was exempted. Notification No. 45/86-C.E., dated 10-2-1986, exempted Indian National Flag falling under heading 6301 from the whole of excise duty. While the exemption continued in various forms till 1996, the Finance Act 1996 prescribed the tariff rate for the National Flag as NIL. But with the introduction of the 8 digit tariff from 28.2.2005, the Flag did not find a specific mention, but obviously it was excisable and so was again exempted by Notification No. 3/2005-C.E., dated 24-2-2005. This Notification No. 3/2005-C.E was superseded by Notification No. 12/2012-Central Excise, Dated: March 17, 2012, keeping the exemption to the Indian National Flag intact.

Coming back to our GST, it is not ordinary folks alone who have doubts about GST on Indian National Flag. It seems the Secretary, Ministry of Culture asked the Revenue Department for a clarification. In a widely web-circulated Office Memorandum, the Tax Research Unit in the Revenue Department informed the Culture Secretary:

The undersigned is directed to refer to your D.O. letter F.No. 42-22/119/2022-AKAM dated 20th May, 2022 regarding ‘Har Ghar Tiranga' and to state that "Indian National Flag" is already exempt from GST (copy of notification enclosed). In terms of this notification, "Indian National Flag" adhering to the Flag Code, 2002 (including the amendments, as made vide order dated 30th December, 2021) would be exempt from GST.

Flag Code: More Than Just Fabric Etiquette

But before you rush to buy one, remember: the Indian flag isn't just a piece of cloth. It's governed by the Flag Code of India, 2002, which lays down strict rules on how it should be displayed, handled, and even manufactured.

Until 2021, only hand-spun and hand-woven flags were permitted. But with the 2021 amendment, machine-made polyester flags entered the scene-sparking debates on tradition versus convenience.

Now, there is a new angle to the story. The GST exemption Notification does not state that "Indian National Flag" should be adhering to the Flag Code, 2002. But this clarification mentions that it has to adhere and highlights the amendment made vide order dated 30th December, 2021. What is this amendment?

Paragraph 1.2 of Part-I of the Flag Code of India read as:

1.2 The National Flag of India shall be made of hand spun and hand woven wool/cotton/silk khadi bunting.

This was amended by order dated 30th December, 2021 as:

1.2. The National Flag shall be made of hand spun and hand woven or machine made, cotton/polyester/wool/silk khadi bunting.

So, the restriction was that the National Flag of India had to be made of hand spun and hand woven wool/cotton/silk khadi bunting. Now it can be machine made and can even be of polyester.

But are paper flags allowed?

Yes. This is specifically mentioned in clause (x) of Paragraph 2.2 of Part-II of the Flag Code of India (2002).

(x) the Flag made of paper may be waved by public on occasions of important national, cultural and sports events. However, such paper Flags should not be discarded or thrown on the ground after the event. As far as possible, it should be disposed of in private consistent with the dignity of the Flag.

From this, it can be inferred that the National Flag can be made out of paper also. But the GST exemption does not make any reference to what the flag is made of; it simply says the Indian National Flag is exempted from GST.

Can the Indian National Flag be imported?

Government of India, Ministry of Commerce & Industry, Department of Commerce, Directorate General of Foreign Trade Notification No.24/2015-2020 New Delhi, Dated: 11th October, 2019 states:

Import of Indian National Flag not adhering to the specifications prescribed under Part - 1, Section 1.2 of Flag Code of India, 2002 is Prohibited.

What is so compelling in the piece of cloth?

The Supreme Court observed in Union of India Versus Naveen Jindal - 2004 AIR 1559

It may be remembered that from time immemorial, people have laid down their lives with a view to salute their own Flag. What is so compelling in the piece of cloth called the National Flag, that people make even the supreme sacrifice for its sake? National Flag indisputably stands for the whole nation, its ideals, aspirations, its hopes and achievements.

Be it a Head of the State, King or peasant, salutes it. A piece of cloth called the National Flag stands for the whole nation, its honour and glory. When it goes up the flag mast, "the heart of a true citizen is filled with pride."

When the draft of Indian Constitution was being debated, the Constituent Assembly realized the importance of the National Flag. An ad hoc committee therefor was constituted headed by Dr. Rajendra Prasad to design the Flag for free India. Other members of the Committee were Abul Kalam Azad, K.M. Panikar, Sarojini Naidu, C. Rajagopalachari, K.M. Munshi and Dr. B.R. Ambedkar. The Flag Committee having been constituted held several meetings and studied the question in depth. It arrived at the following decision:

(a) The flag of the Indian National Congress should be adopted as the National Flag of India with suitable modifications, to make it acceptable to all parties and communities in India.

(b) The flag should be tricoloured, with three bands horizontally arranged.

(c) The colours should be in the following order: saffron on top, white in the middle and dark green at the bottom.

(d) The emblem of the flag should be an exact reproduction of the wheel on the capital of Asoka's Sarnath Pillar, superimposed in the middle of the central white band.

(e) The colour of the emblem should be dark blue.

A motion was moved by Pandit Jawahar Lal Nehru in the Constituent Assembly of India on 22nd July 1947 for the adoption of the National Flag. In the debate, Frank Anthony observed,

While this is a symbol of our past, it inspires us for the future. This flag flies today as the flag of the nation, and it should be the duty and privilege of every Indian not only to cherish and live under it, but if necessary, to die for it.

The significance of the National Flag was aptly portrayed by Pandit Govind Malaviya who said,

The flag may be of a piece of white cloth or of any other insignificant material but when it is accepted as a National Flag, it becomes the emblem of national self-respect. It becomes an expression of the sense of freedom of a nation.

The Supreme Court held in Union of India Versus Naveen Jindal

(i) Right to fly the National Flag freely with respect and dignity is a fundamental right of a citizen within the meaning of Article 19(1) (a) of the Constitution of India being an expression and manifestation of his allegiance and feelings and sentiments of pride for the nation;

(ii) The fundamental right to fly National Flag is not an absolute right but a qualified one being subject to reasonable restrictions under clause 2 of Article 19 of the Constitution of India;

(iii) The Emblems and Names (Prevention of Improper Use) Act, 1950 and the Prevention of Insults to National Honour Act, 1971 regulate the use of the National Flag;

(iv) Flag Code although is not a law within the meaning of Article 13(3)(a) of the Constitution of India for the purpose of clause (2) of Article 19 thereof, it would not restrictively regulate the free exercise of the right of flying the national flag. However, the Flag Code to the extent it provides for preserving respect and dignity of the National Flag, the same deserves to be followed.

This ruling transformed the flag from a ceremonial object into a personal statement. You didn't need a parade or a politician-you just needed pride.

Celebrate the Independence Day with all the fervour you can command and remember there is no GST on the flags.

So, the next time someone asks if the flag attracts GST, tell them it attracts respect, not revenue. And that's the kind of exemption we can all salute.