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12% GST on Security Excise Adhesive Labels: AAR [Read Order]

AAR - GST - security excise adhesive labels - Taxscan

The Karnataka Authority of Advance Ruling (AAR) ruled that 12% Goods and Service Tax (GST) is applicable on the security excise adhesive labels.

The applicant, M/s  Marketing Communication & Advertising Ltd. has sought an advance ruling in relation to supply by the applicant to various distilleries and sought to rule on the correct classification of Security Excise Adhesive Labels i.e., HSN Code applicable and The rate of tax applicable on supply of Security Excise Adhesive Labels.

The Authority consisting of members Dr. M.P. Ravi Prasad and Mashhood ur Rehman Faroqui observed that the primary use of the Security Excise labels is for security.

The Authority also observed that akin to Note No.2 to entry 49 in Central Excise Tariff, a similar Note No. 12 is existing in Chapter 48 of GST Tariff, which says, “except for the goods of Heading 4814 or 4821, paper, paperboard, cellulose wadding and articles thereof, printed with motifs, characters or pictorial representations, which are not merely incidental to the primary use of the goods, fall in Chapter 49.”

“We further observe that that the sixth edition of volume III of Explanatory Notes of World Customs Organisation in relation to Chapter Heading 4911 also includes at item No. 10, ”Self-adhesive printed stickers designed to be used, for example, for publicity, advertising or mere decoration, e.g., “comic stickers” and “window stickers”,” the AAR said.

Therefore, the AAR while taking into consideration the judgment of the Supreme Court in the case of M/s. Holostick India Ltd., which wholly applies to the instant case and therefore the product in question is classified under the Heading 4911 and rate of tax is 12% as per Sr. No. 132 of schedule II of Notification No. 01/2017-CT (R) dated June 28, 2017.

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