Wood waste classification for paper mills falls under HSN 4401, attracting concessional GST instead of the higher rate.

Wood waste supplied to paper mills for pulping only was treated as classifiable under HSN 4401 as wood waste and scrap, because it was not shown to be suitable for timber, furniture, poles, veneer, match sticks, or similar commercial uses. The tariff description for HSN 4401 covers wood waste and scrap used for pulping, paper manufacture, particle board, fibreboard, or fuel, so the concessional GST rate of 2.5% CGST and 2.5% SGST applied. Classification under HSN 4403 was rejected, and the higher 18% rate did not apply.

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Issues: Whether debark/bark eucalyptus wood waste, debark/bark subabool wood waste, and debark/bark poplar wood waste supplied to paper mills for pulping only are classifiable under HSN 4401 as wood waste and scrap and liable to GST at 2.5% CGST plus 2.5% SGST, or whether they fall under HSN 4403 and attract GST at 18%.

Analysis: The goods were found to consist of wood in cut form, including logs and twigs, some with bark and some without bark, and were not shown to be suitable for timber, furniture, poles, veneer, match sticks, or similar end uses. The tariff entry for HSN 4401 covers fuel wood, wood chips or particles, sawdust, wood waste and scrap, whether or not agglomerated, while the explanatory notes describe wood waste and scrap as materials not usable as timber and used particularly for pulping, paper manufacture, particle board, fibreboard, or fuel. On that basis, the goods were treated as falling within the description of wood waste and scrap under entry 198 of the relevant GST rate notifications.

Conclusion: The goods are classifiable under HSN 4401 as wood waste and scrap and are taxable at 2.5% CGST and 2.5% SGST; the higher rate under HSN 4403 does not apply.

Final Conclusion: The advance ruling accepted the applicant's classification claim and affirmed the concessional GST rate for the disputed wood waste supplied to paper mills.

Ratio Decidendi: Wood that is not usable as timber or for the ordinary commercial uses of rough wood, and is meant for pulping or fuel, falls under the tariff entry for wood waste and scrap rather than the entry for wood in the rough.

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