Disposable Paper Cups Attract 18% Tax: West Bengal  AAR

 

The applicant, engaged in the manufacturing of paper cups, sought clarification on various aspects under the GST Act. While the applicant contended for a lower tax rate and a specific HSN code, the revenue authority argued for a higher tax rate of 18%.

AAR observed that paper cups consist of approximately 95% high-degree cellulose paper board. Generally, disposable paper cups are composed of 5% inner polyethene (PE) coatings to prevent leakage.

This decision affects manufacturers who use paper and other materials to make cups. Initially, applicant thought he should pay only 5% GST because most of the cup is paper. But the AAR’s decision means he’ll have to pay more.

RULING

Supply of disposable paper cup as manufactured by the applicant is covered under HSN 4823 40 00 and would attract tax @ 18%.

 

Disposable Paper Cups Attract 18% Tax: West Bengal GST AAR