Tariff classification of paper bags determines GST rate; non-biodegradable paper bags fall under the residual heading and attract higher tax.

The note addresses tariff classification of paper bags under the GST rate notification, contrasting Schedule I Entry for "Paper Sacks/Bags and bio-degradable bags" with Schedule II residual entry for Heading 4819. The applicant did not establish that the products are biodegradable or within any environmentally-classified category; cartons/boxes provision is inapplicable. Consequently the goods fall within the residual scope of Heading 4819 and are subject to the higher rate entry in Schedule II, resulting in an 18% GST levy.

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Issues: Whether paper bags manufactured and supplied by the applicant, classifiable under Heading 4819 of the Customs Tariff Act, 1975, fall under Entry No. 319 of Schedule I to Notification No. 09/2025-Central Tax (Rate) (5%) or under Entry No. 185 of Schedule II to the said Notification (18%).

Analysis: The Notification No. 09/2025-Central Tax (Rate) contains distinct entries: Entry No. 319 (Schedule I) refers to "Paper Sacks/Bags and bio-degradable bags" under Chapters 39 and 48, and Entry No. 185 (Schedule II) covers all goods under Heading 4819 except subheadings 4819 10 and 4819 20. Entry 319's wording links paper sacks/bags with bio-degradable bags; the applicant has not established that its products are biodegradable or otherwise fall within any environmentally-classified category mentioned in that entry. Entry 322 (Schedule I) applies only to cartons, boxes and cases, not to bags. Heading 4819 specifically contains subheadings 4819 30 00 and 4819 40 00 for sacks and bags; since the applicant's goods do not fall under 4819 10 or 4819 20, they fall within the residual scope of Heading 4819 covered by Entry 185 of Schedule II.

Conclusion: The paper bags manufactured and supplied by the applicant are classifiable under Heading 4819 and are covered by Entry No. 185 of Schedule II to Notification No. 09/2025-Central Tax (Rate), attracting GST at 18% (9% CGST + 9% SGST).

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