GST on used empty cartoons/bobbins/corrugated boxes

[Narendra Soni]

Dear experts,

Kindly suggest, whether GST is applicable on used empty cartoons/bobbins/corrugated boxes at the time of sale, if yes, GST rates please.

[KASTURI SETHI]

Dear Querist,

Before 1.7.17, these were exempted by way of Board's circular based on the judgement of Supreme Court. At present, the extract of CBEC's FAQs will be helpful to you for arriving at some reasonable decision.

61. Whether GST will be leviable in case of returnable packing material like drums supplied with finished goods?

Ans. GST will be levied on the value charged for the supply only.

62. How will disposal of scrap be treated in GST?

Ans. If the disposal is in the course or furtherance of business purposes, it will be considered as a supply.

It is almost clear. However, these FAQs have no statutory force. So it requires Board's clarification on the basis of earlier circular.

AI Summary

GST on used packaging: administrative guidance treats sale or disposal as taxable supply when value is charged, clarification needed.
Applicability of GST on used empty packaging is unresolved: earlier departmental circulars based on court authority treated such items as exempt, while CBEC FAQs indicate GST on the value charged for returnable packing materials supplied with finished goods and treat disposal of scrap in the course or furtherance of business as a supply; the FAQs are non statutory and a formal administrative clarification is required to reconcile these positions.