In re Tra Plast Industries (GST AAR Andhra Pradesh)
In the case of In re Tra Plast Industries (GST AAR Andhra Pradesh), the applicant sought clarification on the classification and applicable GST rate for their Natural Fibre Composite (NFC) boards. Tra Plast Industries manufactures NFC boards using natural fibers like rice husk and coconut shell, with PVC as a binding agent. The company argued that despite the use of PVC, the primary characteristics of their product are similar to wood-based products. The composite boards are used in various applications such as furniture, building, and interior decoration, and the applicant submitted that the product should fall under Chapter 44 of the Customs Tariff as wood and articles of wood, attracting a GST rate of 12%.
Upon review, the AAR determined that the NFC boards are more appropriately classified under tariff heading 441193 as “Other Fibreboards.” According to Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017, items classified under this heading, including rice husk boards, are subject to a GST rate of 6% CGST and 6% SGST, making a total of 12%. The ruling affirmed that the boards manufactured by the applicant fall under this category, and the applicable GST rate is 12%, provided the composition and description submitted are accurate.
