Supply Of Disposable Paper Cup Attracts 18% GST: AAR

The West Bengal Authority of Advance Ruling (AAR) has held that the supply of disposable paper cups attracts 18% GST.

The bench of Tanisha Dutta and Joyjit Banik have observed that 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. The bench observed that it is covered under 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 applicant or 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 for the purpose of manufacturing 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.

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.

Applicant's Name: Sekandar Sardar

Date: 04/04/2024

Click Here To Read The Ruling