2023 (4) TMI 961 - AAR - GST

Wooden ice cream sticks and spoons classified as tableware under HSN 4419 90 90, attracting 12% GST rate

AAR Karnataka ruled that wooden ice cream sticks and spoons made from European white Birch wood should be classified under HSN 4419 90 90 as tableware and ... Classification of goods - HSN heading 4419.90.90 - Interpretation of Chapter and Section Notes of the Customs Tariff - Application of WCO Harmonized System Explanatory Notes - GST rate under Notification No. 1/2017-Central Tax (Rate) Schedule II Sl. No. 99BClassification of goods - HSN heading 4419.90.90 - Interpretation of Chapter and Section Notes of the Customs Tariff - Application of WCO Harmonized System Explanatory Notes - Wooden ice cream sticks and wooden ice cream spoons are classifiable as articles of wood under heading 4419. - HELD THAT: - The Authority examined Chapter 44 (wood and articles of wood) and its Chapter Notes and found the impugned articles to be articles of wood made of European white Birch. The applicant's products are not excluded by Note 1 to Chapter 44 and fall within the scope of manufactured articles of wood. The heading proposed by the applicant (4421) relates to other articles of wood such as hangers and machine parts and is not apt for spoons and sticks. The HSN Explanatory Notes and the coverage of heading 4419, which expressly includes spoons and crumb-scoops and other tableware/kitchenware of wood (other than bamboo), establish that the more specific and appropriate classification for the wooden spoons and sticks is 4419.90.90 as tableware made of wood other than bamboo. [Paras 11, 12, 13]Wooden ice cream sticks and wooden ice cream spoons merit classification under HSN code 4419.90.90.GST rate under Notification No. 1/2017-Central Tax (Rate) Schedule II Sl. No. 99B - Application of tariff-based rate to classified goods - The GST rate applicable to the classified products is 12% as specified in the notification. - HELD THAT: - Having classified the impugned products under heading 4419.90.90, the Authority referred to Notification No. 1/2017-Central Tax (Rate) as amended and noted that Schedule II, Sl. No. 99B levies GST at 12% on 'Tableware and Kitchenware of wood' falling under Chapter/heading 4419. Since the wooden spoons and sticks are tableware/kitchenware of wood within heading 4419, they are exigible to GST at the rate specified in the notification. [Paras 14, 15]The wooden ice cream sticks and wooden ice cream spoons are taxable at GST @ 12% under Sl. No. 99B of Schedule II to Notification No. 1/2017-Central Tax (Rate).Final Conclusion: The Advance Ruling holds that the wooden ice cream sticks and wooden ice cream spoons imported, processed and supplied by the applicant are classifiable under HSN 4419.90.90 and are subject to GST at 12% in terms of Schedule II Sl. No. 99B of Notification No. 1/2017-Central Tax (Rate). Issues:The issues involved in the judgment are the classification of wooden ice cream sticks and spoons for GST purposes and the applicable rate of GST on these products.Classification Issue:The applicant sought an advance ruling on the classification of wooden ice cream sticks and spoons they supply to the dairy industry. The applicant contended that the products should be classified under HSN 4421 91 90 and subject to a 12% GST rate. However, upon examination, it was found that the products do not merit classification under this heading. Instead, they were classified under HSN code 4419.90.90 as tableware made of wood other than bamboo, which attracts a 12% GST rate.Admissibility of Application:The applicant claimed that the question of classification of goods falls under Sections 97(2)(a) of the CGST Act 2017, making the application admissible for an advance ruling.Brief Facts:The applicant imports semi-finished wooden spoons and sticks made from European white Birch wood. These products are processed, sorted, bundled, and packed for dispatch to ice cream factories. The applicant argued that since no chemicals are added to the wood and it is not compressed, the products should be classified under HSN 4421 91 90 and taxed at 12%.Legal Interpretation:The Authority considered the provisions of the CGST Act and the KGST Act to be similar unless specified otherwise. The examination of the impugned products revealed that they are articles of wood made from specific wood, qualifying them to be classified under HSN 4419.90.90 and subject to a 12% GST rate.Findings and Discussion:The Authority reviewed the submissions, facts, and arguments presented by the applicant and their representative during the hearing. It was determined that the wooden ice cream sticks and spoons should be classified under HSN code 4419.90.90 and taxed at a rate of 12% as per Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.Conclusion:The judgment ruled that the wooden ice cream sticks and spoons are to be classified under HSN code 4419.90.90 and are subject to a 12% GST rate, as per Sl.No. 99B of Schedule II to Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.