2018 (9) TMI 1038 - AAR - GST

Ruling: Pallets classified under HSN 4415 20 00 subject to 6% GST

IN RE: M/s. V PAC CARTONS INDIA PVT LTD.

The Authority for Advance Rulings determined that 'Pallets and Box Pallets' manufactured by a private limited company fall under HSN 4415 20 00 and are ... Rate of GST - finished goods “Pallets and Box Pallets” - Goods and Services Act, 2017 - Held that:- The commodity “pallets and box pallets” are covered under HSN 4415 20 00 and covered under entry no. 97 of Schedule II of Notification No.01/2017- Central Tax (Rate) dated 28.06.2017 and entry no. 97 of Schedule II of Notification No.01/2017- State Tax (Rate) dated 28.06.2017 and hence the tax rates applicable on the same are 6% under the Central Goods and Services Tax Act and 6% under the Karnataka Goods and Services Tax Act. Issues involved:Determining the applicable GST rate on finished goods 'Pallets and Box Pallets' for a private limited company engaged in manufacturing plywood pallets, plywood boxes, corrugated boxes, and paper packaging products.Analysis:The applicant, a private limited company manufacturing various packaging products, sought an advance ruling to ascertain the GST rate applicable on their finished goods, specifically 'Pallets and Box Pallets.' They highlighted the use of plywood as a primary material in manufacturing these products, with varying GST rates for raw materials and finished goods. The applicant emphasized that despite the different GST rates for plywood sheets and the final products, the common material used is plywood for the end products. This raised the question of the appropriate GST rate for 'Pallets and Box Pallets.'The Authority for Advance Rulings examined the relevant facts and submissions provided by the applicant. They referred to the Harmonized System of Nomenclature (HSN) code 4415.20.00, which covers 'Pallets, box pallets, and other load boards.' Additionally, they cited Entry No. 97 of Schedule II of Notifications under the Central Tax (Rate) and State Tax (Rate) dated 28.06.2017, specifying a tax rate of 6% for 'Packing cases, boxes, crates, drums, and similar packings of wood.' This included pallets and box pallets within the scope of the 6% tax rate under both Central and State Goods and Services Tax Acts.Based on the findings and discussions, the Authority ruled that 'Pallets and Box Pallets' fall under HSN 4415 20 00 and are covered by Entry No. 97 of Schedule II of Notifications related to Central and State Tax Rates. Consequently, the applicable tax rates for these products were determined to be 6% under the Central Goods and Services Tax Act and 6% under the Karnataka Goods and Services Tax Act. This ruling provided clarity on the GST rates for the specified finished goods manufactured by the applicant company.