2023 (4) TMI 961 - AAR - GST

Classification of goods - rate of GST - wooden ice cream sticks and wooden ice cream spoons - to be classified under HSN 4421 91 90 or not - HELD THAT - The impugned products i.e. wooden sticks and wooden spoons are made of specific wood European white Birch (Betula Pendula) taken from Siberian forest and thus they are qualified to be articles of wood. The applicant contended that the impugned products merit classification under HSN code 4421 91 90, however the heading 4421 pertains to other articles of wood such as cloth hangers; articles such as spools, cops, bobbins etc., for cotton machinery, jute machinery and other machinery; and also covers parts of wood. From the above it is seen that the subject articles, i.e., wooden sticks and wooden spoons do not merit classification under the said tariff heading. Alternate classification for the impugned products - HELD THAT - The heading 4419 covers tableware and kitchenware of wood and specifically 4419 90 covers table ware and kitchenware of other wood i.e. other than bamboo wood. Further HSN explanatory notes provides that the heading 4419 covers spoons, crumb-scoops in addition to other articles. The impugned products being the wooden spoon and wooden stick qualify to be covered under spoons and crumb-scoops respectively. Thus the more specific classification of the impugned products would be 4419 90 90 as tableware made up of wood other than bamboo. Rate of GST applicable to the impugned products - HELD THAT - Notification No. 1/2017-Central Tax(Rate) dated 28.06.2017, as amended, specifies GST rate of 12% on the impugned products i.e. wooden sticks and wooden spoons, in terms of Sl.No. 99B of Schedule II to the Notification.

Summary

Issues:
The issues involved in the judgment are the classification of wooden ice cream sticks and spoons for GST purposes and the applicable rate of GST on these products.

Classification Issue:
The applicant sought an advance ruling on the classification of wooden ice cream sticks and spoons they supply to the dairy industry. The applicant contended that the products should be classified under HSN 4421 91 90 and subject to a 12% GST rate. However, upon examination, it was found that the products do not merit classification under this heading. Instead, they were classified under HSN code 4419.90.90 as tableware made of wood other than bamboo, which attracts a 12% GST rate.

Admissibility of Application:
The applicant claimed that the question of classification of goods falls under Sections 97(2)(a) of the CGST Act 2017, making the application admissible for an advance ruling.

Brief Facts:
The applicant imports semi-finished wooden spoons and sticks made from European white Birch wood. These products are processed, sorted, bundled, and packed for dispatch to ice cream factories. The applicant argued that since no chemicals are added to the wood and it is not compressed, the products should be classified under HSN 4421 91 90 and taxed at 12%.

Legal Interpretation:
The Authority considered the provisions of the CGST Act and the KGST Act to be similar unless specified otherwise. The examination of the impugned products revealed that they are articles of wood made from specific wood, qualifying them to be classified under HSN 4419.90.90 and subject to a 12% GST rate.

Findings and Discussion:
The Authority reviewed the submissions, facts, and arguments presented by the applicant and their representative during the hearing. It was determined that the wooden ice cream sticks and spoons should be classified under HSN code 4419.90.90 and taxed at a rate of 12% as per Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

Conclusion:
The judgment ruled that the wooden ice cream sticks and spoons are to be classified under HSN code 4419.90.90 and are subject to a 12% GST rate, as per Sl.No. 99B of Schedule II to Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.