GST Rate of 18% applicable on disposable paper cup: AAR

GST rate of 18% applicable on the disposable paper cup rules Advance ruling authority


CA Pratibha Goyal | May 7, 2024 |

GST Rate of 18% applicable on disposable paper cup: AAR

GST Rate of 18% applicable on disposable paper cup: AAR

[West Bengal AAR in matter of SEKANDAR SARDAR]

The applicant firm, a manufacturing unit is engaged in business of production of paper cups with a plastic coating i.e., laminated paper cups. In this process, the applicant procures raw materials like printed / non-printed paper sheets and bobbin for outward supply of finished goods.

The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under seeking an advance ruling in respect of following questions:

(I) Whether HSN Code 48236900 for paper cups is correct?

(II) Whether SGST @ 2.5% rate is rightly charged by us?

(III) Whether we can claim refund of excess input accumulated in credit ledger due to rate difference of input and outward supply?

Following Observations were made:

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 polyethylene (PE) coatings to prevent leakage.

Chapter 48 of the First Schedule to The Customs Tariff Act, 1975 deals with the articles of paper, paper pulp or paper board. Further, Tariff item 4823 covers „OTHER PAPER, PAPERBOARD, CELLULOSE WADDING AND WEBS OF CELLULOSE FIBERS, CUT TO SIZE OR SHAPE; OTHER ARTICLES OF PAPERPULP, PAPER, PAPERBOARD, CELLULOSE WADDING OR WEBS OF CELLULOSE FIBERS‟. Furthermore, „Trays. dishes, plates, cups and the like, of paper or paperboard‟ is covered under Tariff item 4823 40 00″.

Authority found that goods under following description falling under Chapter / Heading / Subheading / Tariff item 4823 is specified in entry serial number 157 of Schedule-III of Notification No. 1/2017-Central Tax (Rate) dated 28-6-2017 (as amended) and corresponding W.B.State Tax Notification No. 1125 F.T. dated 28.06.2017(as amended) and therefore would attract tax @ 18%;


Supply of disposable paper cup as manufactured by the applicant is covered under HSN 4823 40 00 and would attract tax @ 18%.

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