12% GST applicable to Kraft Paper, Honeycomb Board or Paper Honeycomb Board

In an advance ruling issued by the Authority of Advance Ruling in Karnataka, it was decided that Kraft paper, honeycomb board, or paper honeycomb board be classified under the HSN code - 48089000. The applicant, M/s LSquare Eco Products Private Limited, is a manufacturer of Kraft paper honeycomb boards or paper honeycomb boards using kraft paper, paper honeycomb core, and adhesives. LSquare Eco Products sought an advance ruling on the classification of these products as the materials used in corrugated boxes is similar to the one used for the manufacture of honeycomb boards. The applicant sought advance ruling on the issue of whether the HSN Code applicable for craft paper made honeycomb boards should be 48089000 or 48081000.

The Karnataka AAR ruled that Kraft paper, honeycomb board, or paper honeycomb board is classified under the heading 48089000. The authority further observed that  the structure and purpose for which kraft paper honeycomb board or paper honeycomb board used are similar to the corrugated paper board (listed under 48081000). However, this paper honeycomb boards consists of 80% to 90% of kraft paper and rest is paper to paper adhesive. Therefore, the honeycomb paper board is classified under the heading 48089000, and not as 48081000.