FEBRUARY 28, 2010

Minimise Wastage of Paper while manufacturing Corrugated Boxes!

By K D Chandarana, CA

IN this budget, by notification 10/2010 CE dated 27.02.2010, Entry No. 96 E has been inserted in notification 4/2006 CE dated 01.03.2006 and according to the said entry effective rate of duty for “Cartons, boxes and cases, of corrugated paper and paperboard” falling under chapter heading 4819 10 is 4% subject to condition 12 notified in the said notification. The condition is that:

“The exemption shall be applicable to units manufacturing cartons, boxes or cases, as the case may be, starting from the stage of bought out Kraft paper and not having the facility to manufacture Kraft paper in the same factory.”

Corrugated Paper and Paperboard and Boxes manufacturers are happy with the above concession. But they are surprised with the fact that their main products attracts excise duty @ 4% whereas Waste Paper falling under CH 4707, which is being generated during manufacturing of the Corrugated Paper and Paperboard and Boxes thereof attract central excise duty @ 10% [Refer Sr. No. 36 of Notification 2/2008 CE which is amended by notification 6/2010 CE dated 27.02.2010].

From the above, it appears that the intention of the government may be to pass on the message to such manufacturers to minimise there wastage of paper while manufacturing Corrugated Paper and Paperboard and Boxes thereof. What an idea Sirji!

However, if the intention is to give relief to the manufacturers of Corrugated Paper and Paperboard and boxes thereof, then Waste paper arising during manufacture of Corrugated Paper and Paperboard and Boxes thereof should either be exempted fully or should be at same rate of duty i.e. 4%.