CBIC clarifies applicability of GST rates on Fibre Drums, whether corrugated or noncorrugated

The CBIC vide Circular No. 163/19/2021-GST dated October 06, 2021 has provided clarification regarding GST rates & classification based on the recommendations of the GST Council in its 45th meeting held on September 17, 2021.

Applicability of GST rates on Fibre Drums, whether corrugated or noncorrugated

Hitherto, corrugated boxes and cartons, falling under heading 4819 attracted GST at the rate of 12% (entry 122 of 12% rate schedule), while other cartons falling under this heading attracted GST at the rate of 18%. Disputes have arisen as regards applicable GST on fibre drums, which is partially corrugated (as to whether it is being treated as corrugated or otherwise). This dispute gets resolved on account of the recommendation of the GST Council, in its 45th meeting, to prescribe a uniform GST rate of 18% on all goods classifiable under heading 4819 (with effect from October 01, 2021 under S. No. 153A of Schedule III of notification No.1/2017-Central Tax (Rate) dated June 28, 2017).

For the period prior to October 01, 2021, the Council upon taking note of the fact that there was ambiguity regarding the GST rates applicable on Fibre Drums, because of its peculiar construction (partially corrugated), has decided that supplies of such Fibre Drums even if made at 12% GST (during the period from July 01, 2017 to September 30, 2021), would be treated as fully GST-paid. Therefore, no action for recovery of differential tax (over and above 12% already paid) would arise. However, as this decision has only been taken to regularize the past practice in view of certain ambiguity, as detailed in para 14.1, no refund of GST already paid shall be allowed if already paid at 18%.

Source- https://www.cbic.gov.in/resources/htdocs-cbec/gst/Circular%20No.%20163_18_2021_GST.pdf