The Andhra Pradesh Authority of Advance Ruling (AAR) has ruled that 12% GST payable on natural fibre composite board.
The bench of K. Ravi Sankar (Commissioner of State Tax) and B. Lakshmi Narayana (IRS, Joint Commissioner of Central Tax) has observed that Natural Fibre Composite board manufactured by the applicant comprising of Natural Fibre, Calcium carbonate, recycling waste and other processing aid as well as PVC resin, wherein PVC acts only as a bonding agent would remain classified as wood and Articles of Wood under Chapter 44 and attract 12% rate of GST.
Background
The applicant, M/s TraPlast Industries Pvt. Ltd. is a manufacturer of Natural Fiber Composite (NFC) material, which is used to manufacture boards, doors and frames. The applicant uses the NFC to manufacture boards, doors and frames of different sizes and measurements. The said NFC is made of natural fibres such as rice husk, rice grass, wheatgrass and coconut shell etc.,
The natural fibers are mixed with PVC of suspension polymer, additives like stabilizers, Impact modifiers, UV resistant additives, LUBRICANTS, PROCESSING AIDS are mixed in a High speed mixer for uniform and homogeneous blend and to remove the unwanted vapours in the powder. This process continues up to 110 C centigrade and then drops to a cooling mixture.
Issue Of GST On Natural Fibre Composite Board Before AAR
The applicant sought the advance ruling on the issue Whether Natural Fibre Composite board manufactured by the applicant comprising of Natural Fibre, Calcium carbonate, recycling waste and other processing aid as well as PVC resin, wherein PVC acts only as a bonding agent would remain classified as wood and Articles of Wood under Chapter 44 and attract 12% rate of GST.
Read More: 5% GST Payable On Supply Of ‘Pre-Packaged And Labelled’ Frozen Shrimps: Andhra Pradesh AAR
Conclusion
The AAR held that NFC Board manufactured by the applicant with main content as Rice husk, will more appropriately be classified under CTH 441193 and chargeable to 12% GST.
Applicant’s Name: M/s TraPlast Industries Pvt. Ltd.
AAR No.12/AP/GST/2024
Dated: 07-08-2024
