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2022 (12) TMI 1290 - AAR - GSTClassification of goods - HSN code - rate of GST - eco-friendly expandable paper wrap (honeycomb paper for wrapping) - to be classifiable under 48239013 or 48084090? - HELD THAT - It is observed that the Tariff Item 4823 covers articles of paper and Tariff Item 48239013 has description as Packing and Wrapping Paper and all type of packing and wrapping paper will fall in 48239013 which is a specific tariff item for packing and wrapping paper - As per Rule 3(a) of General Rules for the Interpretation of Import Tariff, the heading which provides the most specific description shall be preferred to headings providing general description. The Tariff item 48239013 contains specific description of Packing and wrapping paper. The product eco-friendly expandable paper wrap (honeycomb paper for wrapping)' is manufactured from the kraft paper and adhesives and the same is used in wrapping/packing as such Rule 3(a) of General Rules for the Interpretation of Import Tariff will apply and the same merits classification under HSN 48239013. In the landmark judgement of RAMESWARLAL MURLIDHAR VERSUS STATE OF ORISSA 1981 (4) TMI 254 - SC ORDER , Hon'ble Supreme Court has observed that , Paper may be presented in plain sheets or in exercise books or in big rolls. It may be thick or thin, light to heavy, bleached or coloured, according to the requirement of purchasers. The form in which the paper is presented or sold is not a conclusive test, but the use to which it is put would furnish a guiding principle. Although, there is no specific entry for the product 'eco-friendly expandable paper wrap (honeycomb paper for wrapping) in Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, there is an entry most akin to the product and process ( at Sr. No. 157 of Schedule III of Notification No.1/2017 CENTRAL TAX (Rate) Dated 28-6-2017 and attracts 9% CGST and 9% SGST or 18% IGST. In the instant case the assessee have themselves declared their product to be a packing material used for packing of goods as a cushioning material, separators or edge protector to make shipping cartons of goods and as pallets and pallet boxes - Hence the eco-friendly expandable paper wrap (honeycomb paper for wrapping) merits to be classified under heading 48239013.
Issues Involved:
1. Classification of eco-friendly expandable paper wrap under HSN code 48239013 or 48084090. Issue-wise Detailed Analysis: 1. Classification of Eco-Friendly Expandable Paper Wrap: Applicant's Submission: - The applicant, an individual registered under GST, prepares eco-friendly expandable paper wrap from kraft paper, intended as a replacement for bubble wrap. - The manufacturing process involves creating a honeycomb structure from kraft paper glued in an alternate pattern, resulting in multiple layers of kraft paper. - The product is primarily used for cushioning, as separators or edge protectors, and for making shipping cartons and pallets. - The applicant argues that the product should be classified under HSN 4808, specifically 48084090, because it consists mainly of kraft paper (80-90%). Applicant's Interpretation of Law: - The applicant relies on a previous ruling by the Karnataka Advance Ruling Authority, which classified a similar product under HSN 4808, attracting 12% GST. - They argue that HSN 4808 is appropriate because it specifically deals with kraft paper products, unlike HSN 4823, which is more general and covers residual paper products. Jurisdictional Officer's Comments: - The Assistant Commissioner, CGST & Central Excise Division I, Gautam Buddha Nagar, recommends classifying the product under HSN 48239013. - The officer reasons that HSN 4808 is related to corrugated paper and kraft paper but does not specifically mention packing or wrapping purposes, which are covered under HSN 4823. - The product, although made from kraft paper, is used for packing and wrapping and thus should be classified under HSN 48239013. Authority's Discussion and Findings: - The Authority clarifies that the provisions of the CGST Act and the UPGST Act are identical for this purpose. - The term "paper" is not defined in the CGST Act or UPGST Act, so it must be understood in its common usage, which includes materials used for wrapping. - The Authority examines the definitions and uses of paper, concluding that the product in question is primarily used for packing and wrapping. - The Authority references a significant judgment by the Rajasthan High Court, which held that all types of paper used for packing purposes are considered packing materials. - The Authority notes that Chapter 4808 covers paper and paperboard in various forms but does not specifically mention packing or wrapping paper. - Chapter 4823, on the other hand, explicitly includes packing and wrapping paper under HSN 48239013. - The Authority applies Rule 3(a) of the General Rules for the Interpretation of Import Tariff, which prefers specific descriptions over general ones. Since HSN 48239013 specifically describes packing and wrapping paper, it is the appropriate classification for the product. Ruling: - The product "eco-friendly expandable paper wrap (honeycomb paper for wrapping)" is classified under HSN 48239013. - This ruling is valid within the jurisdiction of the Authority for Advance Ruling, Uttar Pradesh, and is subject to the provisions of Section 103(2) of the CGST Act, 2017, until declared void under Section 104(1) of the Act. Conclusion: The Authority for Advance Ruling, Uttar Pradesh, concluded that the eco-friendly expandable paper wrap should be classified under HSN 48239013, as it is specifically intended for packing and wrapping purposes. This classification is supported by legal precedents and the specific descriptions provided in the Customs Tariff Act, 1975.
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