A recent Advance Ruling (AR) issued by the Goods and Services Tax (GST) authorities on the classification and tax rate applicable to disposable paper cups.
Key Points:
- The applicant, a paper cup manufacturer, sought clarification on the HSN Code (Harmonized System Nomenclature) and GST rate for their product.
- The applicant classified their product under HSN 48236900 and charged a 2.5% SGST (State GST).
- The authorities ruled that the correct classification is HSN 4823 40 00, attracting an 18% GST rate.
Explanation:
- The applicant argued that their product falls under Chapter 48, which covers paper and paperboard articles.
- They further classified it under HSN 4823, which includes disposable paper cups.
- However, the authorities clarified that HSN 4823 40 00 specifically mentions "Trays, dishes, plates, cups and the like, of paper or paperboard."
- This specific classification attracts a higher GST rate of 18%.
Additional Notes:
- The applicant's claim for refunding excess input tax credit was not addressed in this AR.
- The invoice submitted by the applicant was found to be irrelevant as it described a different product and HSN code.
Conclusion:
Disposable paper cups falls under HSN 4823 40 00 and taxed at 18%.
Topic-Sekandar Sardar (WEST BENGAL-AAR)
Citation-2024 TAXONATION 854 (WEST BENGAL-AAR)
Date-04/04/2024
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