HSN 4802 Paper for Exercise Books Qualifies for GST Exemption: WBAAR

In re Radha Paper Agencies (GST AAR West Bangal)

Summary: The West Bengal Authority for Advance Ruling considered an application filed by Radha Paper Agencies, a trader dealing in various types of paper falling under Chapter 48 of the Customs Tariff, including uncoated paper classifiable under HSN 4802. The application arose following amendments introduced by Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025. The applicant sought clarification on whether uncoated paper supplied to manufacturers for exclusive use in making exercise books, graph books, laboratory notebooks and notebooks qualified for exemption, whether the supplier was required to verify end use, whether purchaser declarations or additional documents were necessary, whether classification depended solely on actual use, whether the supplier could be liable for subsequent misuse or misclassification, and whether any ambiguity existed around the rate-transition date.

The Authority examined Section 97(2) of the CGST Act, 2017 concerning the matters for which an advance ruling may be sought. It held that questions A, D and F fell within the statutory scope because they concerned determination of tax liability and applicability of the notification. Questions B, C and E, dealing principally with verification of end use, supporting declarations or certificates and supplier liability for subsequent purchaser conduct, were held to fall outside the scope of the relevant notification and were therefore not admitted.

On the merits of the admitted questions, the Authority considered the amended rate structure for HSN 4802. Under Notification No. 10/2025-Central Tax (Rate), Serial No. 128 covers specified uncoated paper and paperboard used for exercise books, graph books, laboratory notebooks and notebooks and provides exemption. The Authority contrasted this with Serial No. 167 of Schedule II to Notification No. 09/2025-Central Tax (Rate), which covers the corresponding HSN 4802 goods after excluding the specified notebook-related uses and attracts 9% CGST plus 9% SGST.

The Authority noted that, before the revised notifications, HSN 4802 appeared under Serial No. 112 of Schedule II to Notification No. 01/2017-Central Tax (Rate) and was taxable at 6% CGST plus 6% SGST. The revised framework bifurcated the entry according to the specified use.

For Serial No. 128, the Authority identified the relevant conditions: the goods must be uncoated paper and paperboard; they must be of a kind used for writing, printing or other graphic purposes; they must be in rolls or rectangular sheets; they may be of any size; they must not be paper of headings 4801 or 4803; and they must actually be used for exercise books, graph books, laboratory notebooks or notebooks. The Authority held that where a manufacturer uses HSN 4802 paper and paperboard exclusively for production of the specified notebooks, the goods qualify for Serial No. 128 and the supply is exempt, subject to establishment of the recipient’s status as a manufacturer of exercise books.

On the question whether classification is based solely on actual use, the Authority held that the rate classification of HSN 4802 goods under the GST Acts is based on actual use. It emphasised the words “used for” in Serial No. 128 and distinguished actual use from an intention to use. According to the Authority, actual use can properly be established at the point of manufacture. If the goods are actually used for exercise books, graph books, laboratory notebooks and notebooks, they fall within Serial No. 128; if used for other purposes, they fall within Serial No. 167 of Schedule II to Notification No. 09/2025-Central Tax (Rate) and attract 9% CGST plus 9% SGST.

Regarding the effective date, the Authority referred to Notification No. 09/2025-Central Tax (Rate), the corresponding State notification 1630-F.T. dated 19.09.2025, Notification No. 10/2025-Central Tax (Rate), and corresponding State notification 1631-F.T. dated 19.09.2025. It recorded that all these notifications were effective from 22.09.2025 and therefore found no ambiguity concerning the effective date.

The Authority consequently ruled that supply of HSN 4802 paper to an exercise book manufacturer is taxable at 0% GST, subject to establishing that the recipient is a manufacturer of exercise books. It further ruled that the rate classification is dependent on actual use in manufacturing exercise books, graph books, laboratory notebooks and notebooks, subject to the specified characteristics of the paper and paperboard. It also ruled that there was no ambiguity concerning supplies made close to the rate-transition date.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, WEST BANGAL

a) A person within the ambit of Section 100 (1) of the Central Goods and Services Tax Act, 2017 or West Bengal Goods and Services Tax Act, 2017 (hereinafter collectively called „the GST Act‟), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Tax Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act.

b) Every such appeal shall be filed in accordance with Section 100 (3) of the GST Act and the Rules prescribed thereunder, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018.

1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like manner except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth, for the purposes of these proceedings, the expression “GST Act” would mean the CGST Act and the WBGST Act both.

1.2 The applicant, Radha Paper Agencies, is engaged in the business of trading various types of paper falling under Chapter 48 of the Customs Tariff. The applicant deals, inter alia, in uncoated paper classifiable under HSN 4802 and has sought an advance ruling on the applicable rate of GST on such goods in view of the amendments brought about by Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025. The applicant seeks clarification as to whether uncoated paper supplied by it qualifies for exemption when used for manufacture of exercise books, graph books, laboratory notebooks and notebooks or whether it attracts GST at the rate of 18 percent as applicable to paper put to other uses.

1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made thereunder, seeking an advance ruling in respect of the following questions:

A. Whether the supply of uncoated paper falling under HSN 4802 to a manufacturer for exclusive use in the manufacture of exercise books, graph books, laboratory notebooks and notebooks qualifies for exemption under Sl. No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025?

B. Whether the supplier is required to verify the end use of the paper supplied for claiming the exemption under Sl. No. 128 of Notification No. 10/2025-Central Tax (Rate), and if so, to what extent?

C. Whether declarations or certificates from the purchasing manufacturer are sufficient for availing the exemption, or whether additional documents such as purchase orders, usage undertakings or contracts are required?

D. Whether the applicable GST rate on uncoated paper falling under HSN 4802 is determined solely on the basis of its actual end use and not on its grade or specifications?

E. Whether the supplier can be held liable if the purchaser subsequently misclassifies or uses the paper for purposes other than those specified under Sl. No. 128 of Notification No. 10/2025-Central Tax (Rate), after purchasing it at the exempt rate?

F. Whether any ambiguity exists regarding the applicable GST rate for supplies made during the transition period or around the effective date of the revised GST rate notification?

1.4 Before admitting the questions, we will refer to Section 97(2) of the CGST Act, 2017 to remind ourselves of the questions on which an advance ruling can be sought. The following is the excerpt of the relevant portion:

(2) The question on which the advance ruling is sought under this Act, shall be in respect of,—

(a) classification of any goods or services or both;

(b) applicability of a notification issued under the provisions of this Act;

(c) determination of time and value of supply of goods or services or both;

(d) admissibility of input tax credit of tax paid or deemed to have been paid;

(e) determination of the liability to pay tax on any goods or services or both;

(f) whether applicant is required to be registered;

(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.

1.5 In our view, the question placed under serial no. (A) is covered by clause (e) and questions in serial nos. (D) and (F) are covered by clause (b) of Section 97(2). Questions placed under serial nos. (B), (C) and (E) may primarily appear to be covered by clause (b) of Section 97(2). However, upon deeper analysis, it is evident that the relevant questions fall outside the scope of the referred notification, i.e., Notification No. 10/2025 – Central Tax (Rate) dated 17.09.2025. The said notification does not refer to the subject matter of the questions under serial nos. (B), (C), and (E). This authority cannot discuss anything not referred to in any notification referenced in the questions. This authority cannot go beyond the limits of any notification. We are of the opinion that the question of applicability of a notification cannot be stretched to an extent that calls for importing certain things which are not specifically uttered in the statute itself. Interpretation of a notification and import of certain concepts or mechanisms into the notification are not the same thing. So, questions placed under serial no. (B), (C) and (E) are not admitted and the applicant‟s representative is duly informed about the same. Questions placed before us under serial nos. (A), (D) and (F) are admitted for discussion and ruling.

1.6 The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act.

1.7 The officer concerned from the Revenue has raised no objection to the admission of the application.

1.8 The application is, therefore, admitted subject to the observations recorded in Paragraph 1.5 supra.

2. Submission of the Applicant

2.1 The Applicant submits that it is engaged in the supply of uncoated paper falling under HSN 4802 to various buyers. The Applicant procures paper from paper mills and supplies it to different categories of customers depending on their intended use. According to the Applicant, consequent upon the amendments brought into effect by Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, a distinction has been introduced in respect of paper falling under the same HSN based on its end use. While uncoated paper used for the manufacture of exercise books, graph books, laboratory notebooks and notebooks has been exempted from GST, the same HSN continues to attract GST at the rate of 18 per cent when supplied for any other purpose. In view of the said amendment, the Applicant seeks clarity regarding the correct GST treatment to be adopted while supplying paper under HSN 4802.

2.2 The Applicant submits that it procures paper intended for manufacture of educational exercise books from paper mills without payment of GST on the understanding that such supplies are covered by the exemption introduced vide Notification No. 10/2025-Central Tax (Rate). Thereafter, the Applicant supplies the same paper to registered manufacturers engaged in the manufacture of exercise books and accordingly charges GST at the rate of zero per cent on the belief that the exemption is applicable where the paper is exclusively used for manufacture of exercise books and other educational notebooks. The Applicant further submits that paper supplied for any purpose other than exercise book manufacturing is procured and supplied on payment of GST at the applicable rate of 18 per cent.

2.3 The Applicant submits that prior to the amendment brought about by Notification No. 10/2025-Central Tax (Rate), all supplies of uncoated paper falling under HSN 4802 attracted a uniform GST rate irrespective of the purpose for which the paper was ultimately used. According to the Applicant, there was no end-use-based classification before the issuance of the Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, and therefore supplies of paper under the said HSN were taxed uniformly without reference to the nature of its subsequent utilisation.

2.4 The Applicant further submits that after the amendment, the GST rate applicable to paper under HSN 4802 has become dependent upon the actual end use of the paper. According to the Applicant, where the paper is supplied for use in the manufacture of exercise books, graph books, laboratory notebooks and notebooks, the supply qualifies for exemption and attracts GST at the rate of zero percent. However, where the same paper is supplied for any other purpose, such as manufacture of non-educational notebooks, commercial printing, office use or any other non-textbook related purpose, the applicable GST rate continues to be 18 per cent. The Applicant therefore submits that the amendment introduces a conditional exemption based entirely on the intended use of the goods, not merely on their tariff classification. The Applicant has illustrated that whereas under the pre-amendment regime all supplies of HSN 4802 paper attracted a uniform rate of GST, under the amended regime the applicable rate depends exclusively upon whether the paper is ultimately used for manufacture of exercise books and similar educational notebooks or for any other purpose.

2.5 The Applicant submits that in view of the introduction of an end-use-based exemption, significant uncertainty has arisen regarding the obligations cast upon the supplier while claiming the benefit of exemption. The Applicant seeks clarification regarding the extent to which a supplier is required to verify the intended end use of the paper supplied and whether the supplier can legitimately rely upon declarations furnished by the purchaser. The Applicant also seeks clarification regarding the nature of supporting documents required to establish eligibility for exemption, including whether declarations or certificates from the purchasing manufacturer would be sufficient or whether additional documents such as purchase orders, usage undertakings or contractual stipulations would also be necessary. According to the Applicant, in the absence of specific procedural guidelines, suppliers face considerable compliance uncertainty in determining the correct tax rate.

2.6 The Applicant further submits that the present end-use-based classification exposes suppliers to substantial tax risk. According to the Applicant, if the tax authorities subsequently take the view that the paper supplied was not eligible for exemption and ought to have suffered GST at the rate of 18 percent, the supplier may become liable to tax, interest and penalty notwithstanding the fact that the supplier had acted on the basis of declarations or representations furnished by the purchaser. The Applicant submits that the absence of explicit statutory or procedural safeguards increases the uncertainty faced by suppliers and gives rise to the possibility of disputes regarding classification and rate of tax where the same HSN code attracts different rates depending solely upon its eventual use.

2.7 In view of the aforesaid circumstances, the Applicant submits that an authoritative clarification is necessary in order to ensure uniform implementation of the amended notification and to avoid future disputes concerning classification, applicability of exemption, documentation requirements and supplier liability. The Applicant has therefore prayed for a ruling clarifying whether supplies of uncoated paper falling under HSN 4802 to manufacturers of exercise books qualify for exemption under Sl. No. 128 of Notification No. 10/2025-Central Tax (Rate), whether the applicable rate is determined solely on the basis of the actual end use of the paper, and whether any ambiguity exists in respect of supplies made during the transition period or around the effective date of the amended notification. The Applicant has also expressed the view that the supply of HSN 4802 paper to manufacturers of exercise books is correctly taxable at zero per cent GST under the said notification, that there should be no burden of proof upon the supplier beyond the requirements prescribed under law, and that the supplier should not be held liable in the event the purchaser subsequently misuses or misclassifies the paper after its supply.

3. Submission of the Revenue

3.1 The concerned officer from the revenue has not expressed any view on the merit of the issue raised by the applicant.

4. Observations & Findings of the Authority

4.1 We have gone through the records of the issue as well as submissions made by the authorized representatives of the applicant during personal hearing. The Revenue has not given any opinion on the merits of the issue.

4.2 As per the facts submitted before us, the applicant is engaged in the supply of uncoated paper under HSN code 4802. The applicant procures paper from paper mills at 0% rate of GST since this paper is intended to be used in the production of educational exercise books. The applicant then supplies the paper to registered exercise book manufacturers. The applicant draws our attention to the Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, more specifically to serial no. 128 of the Schedule of the said notification. The relevant entry is reproduced as under:

The applicant points out that the above Schedule prescribes 0% GST (exempt) while the same HSN attracts 18% GST for other uses in other Schedule. The main contention of the applicant is that the rate of tax of uncoated paper and paperboard used for writing, printing or other graphic purposes in rolls or rectangular sheets, of any size, other than paper of heading 4801 or 4803 has become usage-based. That is, if the goods are used for exercise books, graph books, laboratory notebooks and notebooks, it is exempt from tax, and in all other cases it is taxed @ 9% CGST + 9% SGST. Here, in this context, we would like to reproduce the following entry of Schedule II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 for a comprehensive understanding of the issue.

4.3 Under these circumstances, the applicant has placed the following questions before this authority:

A. Whether the supply of HSN 4802 paper to an exercise book manufacturer (who uses it exclusively for manufacturing exercise book) is correctly considered as taxable @ 0% GST?

B. Whether the burden to verify end-use conditions lies on the supplier and to what extent such verification is required for applicability of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025?

C. Whether declarations/ certificates from the purchaser textbook manufacturer are sufficient to avail the conditional exemption of the above notification and whether additional documents (like purchase orders, usage undertakings, contracts etc) are also necessary for this purpose?

D. Whether the correct rate classification is solely dependent on actual use, not on paper grade/ specification?

E. Whether suppliers may be held liable if the purchaser misclassifies or misuses paper of HSN 4802 after obtaining it at 0% GST?

F. Whether there exists any ambiguity for supplies made close to the date of rate transition?

4.4 In Paragraph 1.5 supra, we have discussed the reason for not admitting all the questions placed before us. In our considered view, questions placed under entry number (A), (D) and (F) are covered by the scope of Section 97(2) of the CGST Act, 2017, while the other three, viz. entry number (B), (C) and (E) are not covered by the scope of the referred section. Accordingly, we will limit our discussion to the questions under entry numbers (A), (D), and (F) only.

4.5 The applicant has submitted that prior to Notification No. 09/2025 – Central Tax (Rate) and 10/2025-Central Tax (Rate), both dated 17.09.2025, supply of paper and paperboard under tariff heading 4802 was taxed @ 6% CGST + 6% SGST, regardless of the usage of the goods. However, in the post-Notification No. 10/2025 period, if the paper and paperboard under tariff heading 4802 is used for exercise books, graph books, laboratory notebooks, and notebooks, no GST is levied. Again, the same goods are taxable @ 9% CGST + 9% SGST if used for any other purpose, such as non-educational notebooks, commercial printing, office use, etc. According to the applicant, the above notification gives rise to a tax rate on a specific condition, which is the end use of the goods under question.

4.6 We find that prior to Notification No. 09/2025 and 10/2025 – Central Tax (Rate), both dated 17.09.2025, paper and paperboard under tariff heading 4802 were found in entry in serial no. 112 of Schedule II of Notification No. 01/2017, Central Tax (Rate), dated 28.06.2017, as amended and accordingly it was taxable @ 6% CGST + 6% SGST. The relevant entry is reproduced as under:

What Notification No. 09/2025 has done is to bifurcate the above entry with an exclusion clause and put the exclusion clause of the entry into a different schedule. If we carefully look at serial no. 167 of Notification No. 09/2025 Central Tax (Rate) dated 17.09.2025 supra, we will see that the entry is the same as the description of the above entry except for the bracketed exclusion clause which reads „other than uncoated paper and paperboard for exercise book, graph book, laboratory note book and notebooks only‟. Since this entry is included in Schedule II of the said notification, it is taxed @ 9% CSGT + 9% SGST with effect from 22.09.2025. The only difference between the two entries is that uncoated paper and paperboard used for specific purposes (here, for exercise books, graph books, laboratory notebooks, and notebooks) have been carved out from the description of goods to be found in serial no. 167. This carved-out portion finds entry in serial no. 128 of the Schedule in Notification No. 10/2025 – Central Tax (Rate) dated 17.09.2025 and is accordingly exempt from tax.

If we analyse the description of goods under serial no. 128 of the Schedule in Notification No. 10/2025 – Central Tax (Rate) dated 17.09.2025, the following points will emerge:

• The goods under consideration should be uncoated paper and paperboard
• The paper and paperboard should be of a kind used for writing, printing or other graphic purposes
• It should be in rolls or rectangular (including square) sheets
• It can be of any size
• It should be other than paper of heading 4801 (i.e. newsprint, in rolls or sheets) or 4803 (i.e. toilet or facial tissue stock, towel or napkin stock and similar paper of a kind used for household or sanitary purposes, cellulose wadding and webs of cellulose fibres, whether or not creped, crinkled, embossed, perforated, surface-coloured, surface-decorated or printed, in rolls or sheets)
• It should be used for exercise book, graph book, laboratory notebook and notebooks

It is evident that uncoated paper and paperboard which satisfies the points noted above and is used for exercise book, graph book, laboratory notebook and notebooks, it will come under serial no. 128 ibid. If we juxtapose serial no. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 with serial no. 167 of Schedule II of Notification No. 09/2025 – Central Tax (Rate) dated 17.09.2025, we cannot miss the point that uncoated paper and paperboard used for specific purposes (here, for exercise book, graph book, laboratory notebook and notebooks) has been carved out from the description of goods to be found in serial no. 167 of Schedule II of Notification No. 09/2025- Central Tax (Rate) dated 17.09.2025. This carved-out portion finds entry in serial no. 128 of the Schedule in Notification No. 10/2025 – Central Tax (Rate) dated 17.09.2025.

4.8 In our considered view, if the manufacturer uses the uncoated paper and paperboards under tariff heading 4802 exclusively for the production of exercise books, the goods under the tariff heading will qualify for entry no. 128 and consequently the supply of such paper and paperboards to the said manufacturer will be exempt from GST under Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 on the condition that the referred paper and paperboard has been used for manufacturing of exercise book, graph book, laboratory notebook and notebooks.

4.8 The applicant has raised the question whether the correct rate classification of paper and paperboard under tariff heading 4802 is solely dependent on actual use. If we carefully go through the entries discussed in Paragraph 4.6, it will be evident that two kinds of use of uncoated paper and paperboard under tariff heading 4802 have been considered. They are:

> Uncoated paper and paperboard used for exercise book, graph book, laboratory notebook and notebooks

> Uncoated paper and paperboard used for other purposes

We are of the opinion that rate classification of goods under tariff heading 4802 for the purpose of the GST Acts is solely based on actual use. This is clearly a case of usage-based taxation. There is no other criterion whatsoever. The basis of classification is very unambiguous. In our understanding, the phrase „used for‟ is of utmost importance. Phrases such as „for use in manufacturing‟ or „to be used for manufacturing‟ etc have not been used in serial no. 128 supra. This clearly indicates that there is no scope for intention of use. It is to be used actually. There is no denying the fact that it is only at the point of manufacture that the actual use of paper and paperboard can be understood properly, i.e. whether it has been used for exercise books, graph books, laboratory notebooks, and notebooks or for any other purpose. If uncoated paper and paperboard under tariff heading 4802 is used for exercise books, graph books, laboratory notebooks, and notebooks, it will be covered by entry no. 128 of the Schedule in Notification No. 10/2025-Central Tax (Rate) and will be exempt from GST. The fact that the recipient of such goods is a manufacturer of exercise books, graph books, laboratory notebooks, and notebooks has to be established. If this fact is established, then the supply to the recipient is exempt from tax under the referred entry. If the same goods under tariff heading 4802 are used for purposes other than manufacturing of exercise books, graph books, laboratory notebooks, and notebooks, it will be covered by entry no. 167 of Schedule II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and will be taxed @ 9% CGST + 9% SGST.

4.9 Regarding the issue of the effective date for the change of rate, we should refer to the respective notifications. The notifications that are discussed in this case are as under:

1) Notification No. 09/2025- Central Tax (Rate) dated 17.09.2025 and the corresponding state notification 1630 – F.T. dated 19.09.2025

2) Notification No. 10/2025 – Central Tax (Rate) dated 17.09.2025 and the corresponding state notification 1631 – F.T. dated 19.09.2025

All the above notifications are made effective from 22.09.2025. Accordingly, there is hardly any ambiguity regarding the effective date of the above notifications.

In view of the foregoing, we rule as under:

RULING

Question: Whether the supply of HSN 4802 paper to an exercise book manufacturer (who uses it exclusively for manufacturing exercise book) is correctly considered as taxable @ 0% GST?

Answer: The answer is in the affirmative, subject to the condition that the fact of the recipient being a manufacturer of exercise books is established.

Question: Whether the correct rate classification is solely dependent on actual use, not on paper grade/ specification?

Answer: The rate classification of the subject matter is solely dependent on actual use in the manufacturing of exercise books, graph books, laboratory notebooks, and notebooks. The uncoated paper and paperboard under tariff heading 4802 should be of a kind used for writing, printing or other graphic purposes and it should be in rolls or rectangular (including square) sheets of any size.

Question: Whether there exists any ambiguity for supplies made close to the date of rate transition?

Answer: Since the date of effect of the notifications referred to in the foregoing discussion is clearly mentioned in the notifications and the date of effect is 22.09.2025, there is no scope for any ambiguity whatsoever in respect of the issue referred to in the question.