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Wood waste / scrap is classifiable under HSN 44013100 and will attract 5% GST.

Classification of Goods — Applicant is seeking an advance ruling on following issues :

(a) applicability of GST rate and HSN/classification of wood scrap.

(b) applicability of GST rate on security forfeited by Uttarakhand Forest Corporation.

(c) refund of GST on supply turned into bad debts and supply lost/destroyed in transit.

(d) applicability of GST on mandi fees on local purchase of wood and whether the same is covered under Reverse Charge Mechanism (hereinafter referred to as RCM) in terms of Section 9(3) of the Act. Whether exemption can be claimed if amount of mandi fee is below Rs. 5,000/- in individual consignment.

(e) applicability of GST on penalty.

(i) The residue left after peeling of wood is to be called as wood waste/scrap and is classifiable under Chapter Heading 4401 31 00 or 4401 39 00 and will attract GST @ 5% as on date.

(ii) The forfeited amount pertains to service and is covered under Service Code (Tariff) 9997 94 as "agreeing to tolerate an act" and leviable to GST @ 18% as on date.

(iii) Refund of GST on supply turned into bad debts and supply lost/destroyed in transit are not covered under sub-section (2) of Section 97 of the CGST/SGST Act, 2017 and thus no ruling can be given on this issue.

(iv) Mandi fee paid on the purchase of wood from the unregistered person does not attract GST under Section 9(3) and Section 9(4) of the CGST/SGST Act, 2017.

(v) The penalty amount pertains to service and is covered under Service Code (Tariff) 9997 94 as “agreeing to tolerate an act” and leviable to GST @ 18% as on date. — Parvatiya Plywood (P) Ltd., In Re.. [2019] 13 TAXLOK.COM 099 (AAR-Uttarakhand)

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