Page 34 - GSTL_13th August 2020_Vol 39_Part 2

J42 GST LAW TIMES [ Vol. 39
logs” for pulping, C.B.I. & C. clarified the same with GST rate of @ 18% in the
said circular.
The Supreme Court in the case of Displayor of Customs v. Soni Enterprises -
reported in 1998 (98) E.L.T. 579 (S.C.), was held that “wood roughly squared and
half squared and not further manufactured” classifiable under Heading 44.03 of
the Customs Tariff.
The above decision of the Hon’ble Supreme Court has been reflected in
Board’s Circular dated 31-12-2018.
In view of the Board’s Circular one of the paper industry had preferred
an application before the Authority for Advance Ruling to know the rate of GST
for payment on procurement of “wood in logs’ from the traders and the Authori-
ty for Advance Ruling pass order as under :
The Authority for Advance Ruling, Karnataka, in the case of M/s. West
Coast Paper Mills Ltd., Advance Ruling No. KAR ADRG 67/2019, dated
21-9-2019 reported in 2019 (30) G.S.T.L. 98 (A.A.R. - GST). The applicant
filed application for the following question :
What is the rate of GST applicable on following types of wood meant for
pulping?
(i) Debarked Eucalyptus Wood
(ii) Debarked Acacia Wood
(iii) Casuarina Wood
(iv) Subabul Wood
Ruling : Since these goods are poles of rough wood of length 4 to 5 feet,
with or without bark, these are appropriately classifiable under Heading
4403 ibid - These are chargeable to GST @ 18% (9% CGST + 9% SGST) in
terms S. No. 134 of Schedule-III of Notification No. 1/2017-C.T. (Rate),
dated 28-6-2017 and similar Notification under Karnataka Goods and
Services Tax Act, 2017 - Sections 7 and 9 of Central Goods and Services
Tax Act, 2017.
In view of the clarification issued by the Board and case laws under Customs as
well as Advance Ruling under GST, wood in logs should be classified under Head-
ing 4403 for the purposes of payment of GST @ 18%.
Applicability of Board’s Circular
It is settled principle that the applicability of Board’s circular should be
prospective if the circular is oppressive in nature and retrospective effective if the
circular is beneficial for the assessees/taxpayers. The Apex Court, wherein it was
held that beneficial circular, has to be applied retrospectively and oppressive
Circular to be applied prospectively as under :
The Hon’ble Apex Court in the case of Suchitra Components Ltd. v. Com-
missioner of Central Excise, Guntur, reported in 2007 (208) E.L.T. 321 (S.C.),
held that a beneficial circular to be applied retrospectively while oppres-
sive circular has to be applied prospectively. Thus, when the circular is
against the assessees, they have right to claim enforcement of the same
prospectively. This was relied on by Apex Court’s earlier decision of
Commissioner of Central Excise, Bangalore v. Mysore Electricals Industries
Ltd., reported in 2006 (204) E.L.T. 517 (S.C.).

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