Name of the Applicant:

Premier Tissues India Limited

Appeal No.:

KAR ADRG 41/2021

Ruling pronounced by:

GST AAR Karnataka

Date of Ruling:

30-07-2021

The applicant is engaged in the manufacture of tissue paper in various categories like facial tissues, kitchen towel, toilet roll & napkins. These tissue papers are manufactured from waste paper, cup stock, tissue brokes and soft wood pulp.

The applicant submitted the write-up on the raw material procured and consumed for manufacture of the final products:

• Wood Pulp: Wood is the main resource of fibre materials for paper and pulp making. Wood provides about 93% of fibres of pulp making.
• Depending on the type of tree, wood can be divided into two types: softwood and hardwood. Wood fibre is made up of 35% softwood and 65% hardwood. Both softwood and hardwood can be applied to paper and pulp making. Wood pulp can be classified into softwood pulp and hardwood pulp.
• The applicant uses raw materials like soft wood pulp, silica pulp, waste paper, cup stock waste, silicon coated paper and chemicals for manufacture of tissue papers.

The applicant stated that they are discharging GST by classifying their products under HSN 4803 as per entry no. 145 of Schedule III to the Notification No. 1/2017- Central Tax (Rate) dated 28-06-2017 whose description is as under:

“Toilet or facial tissue stock, towel or napkin stock and similar paper of a kind used for household or sanitary purposes, cellulose wadding and webs of cellulose fibres, whether or not creped, crinkled, embossed, perforated, surface-coloured, surface-decorated or printed, in rolls or sheets.” Accordingly. The applicant has been discharging GST @ 18% on their products.

The applicant contends that the Notification No. 1/2017- Central Tax (Rate) dated 28-06-2017, under entry number 112 of Schedule II, covers the following goods under HSN 4802, whose description reads as under:

“Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch-cards and punch tape paper, in rolls or rectangular (including square) sheets, of any size, other than paper of heading 4801 or 4803; hand-made paper and paperboard”

The applicant further contends that ‘tissue paper not containing fibres obtained by a mechanical or semi-mechanical process or of which not more than 10% by weight of the total fibre content consists of such fibres is classifiable under HSN 4802 attracting output tax of 12%.

It is clearly evident that GST rate of 12% is applicable only to uncoated paper and paperboard used for writing, printing or other graphic purposes; non-perforated punch-cards and punch tape paper, in rolls or rectangular/ square sheets, of any size; hand-made paper and paperboard. Further, the paper of heading 4801 and 4803 are excluded from the heading 4802.

The impugned products being the tissue papers fall under other paper and paperboard not containing fibres obtained by a mechanical or semi-mechanical process and hence do not get covered under uncoated paper and paperboard. Therefore, the impugned products of the applicant are not covered under the entry no. 112 of Schedule-II to Notification supra and hence the GST rate of 12% is not applicable to them.

Question

Ruling

Whether the supply of tissue papers is covered under Sr. No. 112 of Schedule II of the Notification No. 01/2017 Central Tax (rate) and therefore is leviable to GST @ 12%.

The supply of tissue papers by the applicant is not covered under the entry no. 112 of Schedule II to the Notification No. 01/2017 Central Tax (Rate) and therefore, GST rate of 12% is not applicable to supply of the applicant.