2026-VIL-143-AAR
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SGST Advance Ruling Authority

GST – West Bengal AAR - Classification of ruled/lined paper sheets - End-use based exemption – Supply chain interpretation – Applicant engaged in manufacturing ruled and lined paper sheets under trade name by converting uncoated paper and paperboard - Applicant manufactures ruled and lined paper sheets from uncoated paper reels classified under HSN 48025590 and supplies manufactured sheets to notebook and exercise book manufacturers exclusively for manufacture of exercise books, graph books, laboratory notebooks and similar stationery products – Applicable classification of ruled and lined paper sheets and whether supply qualifies for NIL rate under Notification No. 10/2025-Central Tax dated 17.09.2025 when final end use is manufacture of exercise books and end-use condition is satisfied throughout supply chain at intermediate processor stage - HELD – The ruled and lined paper sheets manufactured from uncoated paper and paperboard and supplied to notebook and exercise book manufacturers for exclusive use in manufacture of exercise books qualify for exemption under Sl. No. 128 of Notification No. 10/2025-Central Tax dated 17.09.2025 subject to condition that fact of recipient being manufacturer of exercise books is established - End-use based exemption contemplates that uncoated paper and paperboard used for exercise books, graph books, laboratory notebooks and notebooks qualifies for exemption while same goods used for other purposes attracts 18% GST. The Notification does not prescribe that exemption is confined only to direct supply by paper mills to final exercise book manufacturers but rather prescribes that paper shall be used for exercise books indicating applicability throughout supply chain when actual end use is manufacture of exercise books - Uncoated paper and paperboard is covered by tariff heading 480261 and the specific tariff item number is 48026190 when it is supplied in rolls. When it is supplied in sheets it is covered by tariff heading 480262 and the specific tariff item number is 48026290 - All suppliers in the entire chain of supply of uncoated paper and paperboard under tariff heading 4802 cannot claim for exemption vide serial no. 128 of the Schedule in Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 on the ground that at the end point the goods will be used to manufacture exercise books and notebooks - Each limb of the supply chain should be regarded as an independent and distinct supply and should be taxed accordingly. If the recipient of uncoated paper and paperboards is established as a manufacturer of exercise books, graph books, laboratory notebooks, and notebooks, then the supply to the recipient is exempt from tax under the referred entry.
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