GST Rate on Bagasse-Based Particle Board (Plain or Laminated)
Indian Government, in
the Goods and Services Tax (GST) package, has simplified taxation on all goods
and services in the nation, which clearly enables the manufacturer and a
consumer to understand this tax system. Among such products, the "Bagasse-based Particle Board" is one product under question between
manufacturers as well as consumers for this alternative-wood-based board to
save ecology. We will analyze the GST on bagasse-based particle board in India,
along with its classification, applicable GST rates, and also the important
consideration for business entities which are involved with its production and
supply.
What is Bagasse-Based Particle Board?
A bagasse-based particle board (plain or laminated) is an
engineered wood board used for manufacturing structural flooring, doors, and
other building components, largely constructed from the residue after squeezing
juice out from sugarcane popularly known as "bagasse". The material is
environmentally friendly because it contributes to recycling the by-products of
the sugar industry. Therefore, the product can be used for furniture and
building industries in a sustainable manner. Bagasse, being compressed and
bonded with resins, has the flexibility to be used for furniture, floors, and
even in wall construction and partitions.
Challenges in the GST Structure
Classification of Bagasse-Based Particle Board Under GST
As per notification no 01/2017 (Central Rate), dated 28.06.2017
Schedule II,
Tax (Rate 6% CGST)
Entry Serial No. 92,
Chapter Heading "44 or any Chapter,
Clause (f), Description of Goods: "Bagasse Board"
In this regard, GST deparment is also issued a circular F. No.354/432/2018-TRU for Clarification regarding GST rates & classification, where Para No. 9 as under
......9. Applicability of GST on supply of Bagasse based laminated particle board:
9.1 Representation has been received seeking clarification on applicability of GST rate on Bagasse based laminated particle board. In this context, it is sated that the Bagasse Board has specific entry at S. No. 92 in Schedule II to the Notification 1/2017-Central Tax (Rate). Accordingly, the said entry covers Bagasse boards falling under 44 or any other chapter and 12% GST. Further, it is also stated the description “Bagasse board” in the said entry also covers Bagasse board [ whether plain or laminated].
9.2 Thus, it is clarified Bagasse board [whether plain or laminated] falling under chapter 44 will attract concessional GST rate of 12%.
Futher,
In case of Prayagraj Dyeing & Printing Mills Pvt. Ltd. (GST AAR Gujarat), GST of Bagasse based Particle Board manufactured with a composition of 75% of bagasse, 25% of wood particles and 5 kgs. of resins. Held that— Bagasse based Particle Board, which is a composition of 75% of bagasse, 25% of wood particles and 5 kgs of resins, will fall under entry at Sr. No. 137A in Schedule III to the Notification No. 01/2017- Central Tax (Rate), dated 28.06.2017.
GST Rate on
Bagasse-Based Particle Board
2. Product features: As the board has a different HSN code or has some unique characteristics, it will attract different tax rates.
Conclusion
As per above discussion about to "GST on Bagasse-Based Particle Board (Plain or Laminated)" we can say that GST on Particle board is based to how to manufacturing Particle board (plain or laminated)
If only bagasse is used, the GST rate is 6% + 6%. However, if wood or any material not derived from agricultural produce is used, the GST rate is 9% + 9%