Radha Paper Agencies, a paper trader from Kolkata, sought clarity on the GST implications for HSN 4802 uncoated paper following amendments in September 2025. This paper could attract different GST rates based on its use. Prior to the amendments, this paper was generally taxed at 6% CGST and 6% SGST. However, the amendments introduced a distinction where paper used for educational notebooks such as exercise books, graph books, and laboratory notebooks was exempted from GST, while paper used for other purposes was taxed at 9% CGST and 9% SGST.
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The Authority was asked to clarify the applicable GST rate, the verification of actual use, and the effective date of the new rates. It determined that the key factor for exemption is the paper's actual use, not its grade or specification. The exemption applies if the paper is used by manufacturers of specified notebooks. This is described as “usage-based taxation,” where actual use must be verified during manufacturing. If the paper is used for other purposes, the higher tax rate applies.
Regarding the effective date, the Authority confirmed that there was no uncertainty. Both Notification No. 09/2025 and Notification No. 10/2025 clearly stated that the new rates took effect from 22 September 2025, thus resolving any ambiguity about the transition date.
Order Date - 01 September 2026
Facts -
- Radha Paper Agencies, a Kolkata-based trader of paper, supplies uncoated paper falling under HSN 4802 to different customers. After the September 2025 GST amendments, it sought clarity because the same paper could attract different GST rates depending on its use.
- Before the amendment, HSN 4802 paper was generally taxed at 6% CGST + 6% SGST irrespective of its ultimate use. The applicant stated that the amended notifications introduced a distinction for paper used in specified educational notebooks.
- Under the amended framework, paper used for exercise books, graph books, laboratory notebooks and notebooks was carved out and placed under an exemption entry, while paper used for other purposes was placed under a 9% CGST + 9% SGST entry.
- The applicant therefore asked the Authority not only about the applicable rate, but also about end-use verification, purchaser declarations, supplier liability and the transition date. However, the Authority admitted only questions concerning rate applicability, actual-use classification and the effective date.
Issue -
- Whether HSN 4802 uncoated paper supplied to manufacturers of exercise books and similar notebooks qualifies for 0% GST based on its actual use, and whether there was any uncertainty regarding the effective date of the revised GST rates.
Order -
- The Authority examined the two amended entries together. It found that Notification No. 09/2025 places HSN 4802 paper meant for purposes other than the specified notebooks under 9% CGST + 9% SGST, while Notification No. 10/2025 separately carves out paper used for exercise books, graph books, laboratory notebooks and notebooks for exemption.
- The decisive factor is actual use, not merely the paper’s grade or specification. The Authority specifically held that this is a case of “usage-based taxation” and stressed the words “used for” in the exemption entry. Actual use can properly be established at the manufacturing stage.
- The exemption is conditional on the recipient being a manufacturer of the specified products. If HSN 4802 paper is actually used for manufacturing exercise books, graph books, laboratory notebooks or notebooks, the supply falls under the exemption; if it is used for other purposes, the 9% CGST + 9% SGST rate applies.
- There was no ambiguity concerning the transition date. The Authority noted that both relevant notifications expressly took effect from 22 September 2025, and therefore held that there was no ambiguity regarding the effective date of the revised rates.
