HSN code for change in Paddy straw

[KARAN VERMA]

Sir, I m buying paddy straw for HSN 1213 (0 %), then my process is cutting of such bulk rolls of paddy straw into small pieces and sold such cutting paddy straw to other party for use as boiler fuel.

My question is whether above cutting process lead to change in HSN code and GST rate.

[Rajagopalan Ranganathan]

Sir,

Cutting of paddy straw into small pieces does not result in emergence of a new product which is different from paddy straw. The cutting of paddy straw does not amount to processing and after cutting paddy straw remains as paddy straw only. The same is classifiable under HSN 12.13 and attracts nil tax. This is my opinion.

[Ganeshan Kalyani]

I agree with the views of Sri Rajagoplan Sir.

[KASTURI SETHI]

In support of views of both experts, see authority in the form of C.B.I. & C. Circular F. No. 332/2/2017-TRU, dated December, 2017 (Serial No. 19).

[KARAN VERMA]

Thanks to all.

AI Summary

Cutting Paddy Straw Doesn't Alter HSN Code 1213 or GST Rate, Says Tax Authority Circular A query was raised regarding whether cutting paddy straw into smaller pieces changes its Harmonized System of Nomenclature (HSN) code or alters its Goods and Services Tax (GST) rate. The consensus among respondents was that cutting paddy straw into smaller pieces does not create a new product and thus does not change its classification under HSN 1213, which carries a nil tax rate. This view was supported by referencing a specific circular from the Central Board of Indirect Taxes and Customs. The original inquirer expressed gratitude for the clarification provided.