The AAR, West Bengal in the case of In Re. Sekandar Sarkar [Case No. WBAAR 02 OF 2024 dated April 04, 2024] ruled that, Paper Cups manufactured would fall under HSN 4823 40 00 and attract GST at the rate of 18 percent as the aforesaid goods would fall under Chapter / Heading / Subheading / Tariff item 4823 as specified in entry Sl. No. 157 of Schedule-III of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017 (“the Goods Rate Notification”).
Facts:
Sekandar Sarkar (“the Applicant”) is engaged in the manufacturing of paper cups. The Applicant filed an application for Advance Ruling on whether the HSN Code 48236900 applicable for paper cups is correct. The Applicant also desires to know whether the State GST would be applicable at the rate of 2.5 percent and whether the Applicant can claim refund of excess input accumulated in credit ledger due to rate difference of inward and outward supply.
Issue:
Whether Paper Cups manufactured would fall under HSN 4823 40 00 and attract GST at the rate of 18 percent?
Held:
The AAR, West Bengal in the case of WBAAR 01 of 2024 held as under:
- Observed that, the Chapter 48 of the First Schedule of the Customs Tariff Act, 1975 deals with the articles of paper, paper pulp or paper board. Further, Tariff item 4823 covers ‘Other paper, paper board, cellulose, wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers’. Furthermore, ‘Trays. dishes, plates, cups and the like, of paper or paperboard’ is covered under Tariff item 4823 40 00′.
- Noted that, the Applicant manufactures paper cups with a plastic coating i.e. laminated paper cups to prevent leakage.
- Opined that, the goods under the description “Other paper, paperboard, cellulose wadding and webs of cellulose fibres, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres [other than paper pulp moulded trays, braille paper, kites, paper mache articles]” which is falling under Chapter / Heading / Subheading / Tariff item 4823 as specified in entry serial number 157 of Schedule-III of the Goods Rate Notification.
- Ruled that, the supply of disposable paper cups manufactured by the Applicant is covered under 4823 40 00 and would attract GST at the rate of 18 percent.
Conclusion: The AAR’s decision in Sekandar Sarkar’s case establishes that paper cups fall under HSN 4823 40 00, attracting an 18% GST rate. This ruling not only clarifies the tax classification but also ensures that businesses involved in manufacturing and supplying paper cups understand their tax obligations, thereby aiding in compliance with GST regulations.
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