18 % GST Attracts on Supply of Disposable Paper Cup: AAR [Read Order]

The West Bengal Authority of Advance Ruling ( AAR ) has held that the supply of disposable paper cups attracts 18% GST. It was observed that manufactured disposable paper cups are covered under HSN 4823-4000.

Sekandar Sardar, the applicant assessee is in the business of manufacturing paper cups. The applicant makes purchases of both printed and non-printed paper sheets and bobbins as inputs to manufacture paper cups. The applicant supplies the goods, namely disposable paper cups as manufactured by him, charging output tax at the rate of 5%, and the applicant classifies the item under HSN Code 4823 69.00. The applicant has made the application seeking an advance ruling in respect of the taxability of the paper cups.

A disposable paper cup is made out of paper and often coated with plastic or wax to prevent liquid from leaking out or soaking through the paper. It may be made of recycled paper. It is known that paper cups consist of approximately 95% high-degree cellulose paper board. Generally, disposable paper cups are composed of 5% inner polyethene (PE) coatings to prevent leakage.

The two-member bench of Tanisha Dutta and Joyjit Banik observed that it is covered under the description falling under Chapter, Heading, Sub-heading, or Tariff Item 4823, as specified in entry serial number 157 of Schedule-III of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017 (as amended). The AAR held that the supply of disposable paper cups as manufactured by the applicant is covered under HSN 4823-4000 and would attract 18% GST.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates