M/s Vegan Wood Private Limited, based in Morbi, Gujarat, manufactures a product called Rice Husk Board or Natural Fibre Composite Board, which is made from rice husk fibre, PVC resin, calcium carbonate, and additives. The company sought an advance ruling on the classification and applicable GST rate for this product. Initially, their application was rejected due to insufficient documentation, but upon appeal, the case was remanded for reconsideration, and the company provided the necessary invoices and test reports.
Read more: Delhi High Court - An Advocate cannot claim client privilege as an absolute bar to a GST investigation where there is prima facie material suggesting his own involvement in the affairs under investigation [Order attached]
The primary issue was whether the Rice Husk Board, which uses PVC as a binder, falls under Chapter 44 (HSN 4411) and whether it should attract a GST rate of 12% or 5%. The Gujarat Authority for Advance Rulings (AAR) determined that the product is not a particle board, as it contains more than 15% binder by weight, which is higher than typical particle boards. Instead, it was classified as a fibre board under HSN 4411, as the product is made by bonding rice husk fibres with PVC resin and other organic substances.
As per the ruling, the Rice Husk Board is subject to a 12% GST rate until September 21, 2025, as per Sr. No. 92(c) of Schedule II (6%+6%) of Notification 01/2017-CT(R). From September 22, 2025, it will attract a reduced GST rate of 5% under Sr. No. 292(c) of Schedule I (2.5%+2.5%) of Notification 09/2025-CT(R). This ruling is based on the applicant's submissions and test reports, contingent upon their authenticity.
Order Date - 29 October 2026
Facts -
- M/s Vegan Wood Private Limited (Morbi, Gujarat) manufactures Rice Husk Board, also called Natural Fibre Composite Board. It is made by extruding rice husk fibre (about 32%), PVC resin (about 27%), calcium carbonate and additives.
- The company applied for an advance ruling on 22.03.2024. The Authority first rejected the application as non-maintainable, citing inadequate test reports and missing invoices and brochures.
- On appeal, the Appellate Authority (Order dated 25.02.2026) set aside that rejection and remanded the matter for a fresh decision. The applicant then filed invoices, test reports from Prominent Testing Centre LLP, Patiala, and a lab clarification dated 30.06.2026.
- The applicant claimed Chapter 44 classification and relied on rulings from Tamil Nadu, Andhra Pradesh and CESTAT. It also claimed the reduced 5% rate under Notification 09/2025-CT(R).
Issue -
- Whether Rice Husk Board with PVC as binder is classifiable under Chapter 44 (HSN 4411) and what GST rate applies, 12% or 5%.
Order -
- The HSN Notes say particle board uses a binder that generally does not exceed 15% of board weight. Test reports showed PVC at about 27.25% and 27.30%. Rice husk fibre is also first extracted and then mixed with the binder, so the product falls outside Heading 4410.
- The Authority compared the applicant’s process and product with the HSN Notes to 4411. Fibres from rice husk, a ligneous material, are bonded with PVC resin and other organic substances. This matches fibre board, whether or not bonded with resins.
- IS specifications are not mandatory for fixing the tariff heading. Classification rests on the GRIs, Section and Chapter Notes, HSN and the product’s essential character. Under Section 103 of the CGST Act, advance rulings bind only the applicant and its jurisdictional officer, so reliance on other applicants’ rulings was unjustified.
- Rice Husk Board is covered at Sr. No. 92(c) of Schedule II (6%+6%) of Notification 01/2017-CT(R) up to 21.09.2025. It is covered at Sr. No. 292(c) of Schedule I (2.5%+2.5%) of Notification 09/2025-CT(R) from 22.09.2025. The ruling rests on the applicant’s submissions and test reports and is subject to their authenticity.
