Scrap wood HSN Code

Understanding Scrap Wood HSN Codes for GST Compliance

The lifecycle of wood doesn’t always end with its primary use. From sawmill offcuts and construction debris to old furniture and packing materials, “scrap wood” is a valuable resource for recycling, energy generation, or even crafting. For businesses involved in the trade of scrap wood in India, understanding the correct Harmonized System of Nomenclature (HSN) code and the applicable Goods and Services Tax (GST) rate is essential for seamless operations and regulatory adherence.

Fortunately, the HSN system provides clear classifications for various forms of wood waste and scrap, primarily under Chapter 44: Wood and articles of wood; wood charcoal.

Classifying Wood Waste and Scrap Under HSN 4401

The majority of wood waste and scrap falls under HSN 4401, which broadly covers “Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chips or particles; sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes, pellets or similar forms.”

The crucial distinction within this heading often lies in the form of the scrap and whether it has been agglomerated (compressed into a more uniform shape like pellets or briquettes).

Here are the key HSN codes for different types of wood scrap, along with their GST rates:

• 44013900: Sawdust And Wood Waste And Scrap, Whether Or Not Agglomerated In Logs, Briquettes, Pellets Or Similar Forms – Sawdust And Wood Waste And Scrap, Whether Or Not Agglomerated
  • This is a broad category for agglomerated sawdust and wood waste/scrap. The GST rate is 5%, effective from July 1, 2017.
• 44013100: Sawdust And Wood Waste And Scrap, Whether Or Not Agglomerated In Logs, Briquettes, Pellets Or Similar Forms – Sawdust And Wood Waste And Scrap, Whether O – Wood Pellets
  • This specific HSN code identifies wood pellets, which are a common form of agglomerated wood scrap used for fuel. The GST rate is 5%, effective from July 1, 2017.
• 44014000: Sawdust And Wood Waste And Scrap, Not Agglomerated
  • This code is specifically for sawdust and wood waste and scrap that has not been agglomerated. This would include loose sawdust, wood shavings, and uncompressed wood chips. The GST rate is 5%, effective from July 1, 2017.
• 44012100: Fuel Wood, In Logs, In Billets, In Twigs, In Faggots Or In Similar Forms; Wood In Chips Or Particles; Sawdust And Wood Waste And Scrap, Whether Or Not Agglomerated In Logs, Briquettes, Pellets Or Similar Forms – Wood In Chips Or Particles : Coniferous
  • This code covers coniferous wood in chips or particles, often a form of wood waste. The GST rate is 5%, effective from July 1, 2017.
• 44012200: Fuel Wood, In Logs, In Billets, In Twigs, In Faggots Or In Similar Forms; Wood In Chips Or Particles; Sawdust And Wood Waste And Scrap, Whether Or Not Agglomerated In Logs, Briquettes, Pellets Or Similar Forms – Wood In Chips Or Particles : Non-Coniferous
  • Similar to the above, but for non-coniferous wood in chips or particles. The GST rate is 5%, effective from July 1, 2017.
• 44011010: Fuel Wood, In Logs, In Billets, In Twigs, In Faggots Or In Similar Forms; Wood In Chips Or Particles; Sawdust And Wood Waste And Scrap, Whether Or Not Agglomerated In Logs, Briquettes, Pellets Or Similar Forms- Fuel Wood, In Logs, In Billets, In Twigs, In
  • This general category for fuel wood in various basic forms also attracts a 5% GST, effective from July 1, 2017.

Distinguishing Wood Pulp and Paper/Paperboard Scrap

It’s important to differentiate raw wood scrap from processed wood pulp or paper/paperboard waste, which fall under different HSN chapters:

• Chapter 47: Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard
  • This chapter covers materials that have undergone some level of processing. For instance, 47061000 (Pulps Of Fibres Derived From Recovered (Waste And Scrap) Paper Or Paperboard Or Of Other Fibrous Cellulosic Material – Cotton Linters Pulp) and 47069200 (Pulps Of Fibres Derived From Recovered (Waste And Scrap) Paper Or Paperboard Or Of Other Fibrous Cellulosic Material – Other : Chemical) attract a 12% GST. This is for pulp derived from waste, not the raw waste itself.
  • However, 47072000 (Recovered (Waste And Scrap) Paper Or Paperboard – Other Paper Or Paperboard Made Mainly Of Bleached Chemical Pulp, Not Coloured In The Mass) and 47073000 (Recovered (Waste And Scrap) Paper Or Paperboard – Paper Or Paperboard Made Mainly Of Mechanical Pulp (For Example, Newspapers, Journals And Similar Printed Matter)) are for recovered paper or paperboard waste, attracting a 5% GST, effective from October 13, 2017.
• Chapter 48: Paper and paperboard; articles of paper pulp, of paper or of paperboard
  • This chapter includes some specific articles made from wood pulp or paperboard, such as 48237020 (Other Paper, Paperboard, Cellulose Wadding And Webs Of Cellulose Fibres, Cut To Size Or Shape; Other Articles Of Paper Pulp, Paper, Paperboard, Cellulose Wadding Or Webs Of Cellulose Fibres – Moulded Or Pressed Article Of Paper Pulp : Wood Pulp Board), which has an 18% GST. This is for a processed board, not raw scrap.

GST Rates and Compliance for Scrap Wood

The consistent 5% GST rate for most raw wood waste and scrap under HSN 4401 makes it relatively straightforward for businesses to comply. However, always ensure you classify the wood scrap accurately based on its form and processing level. For any ambiguity, it is advisable to consult a tax professional or refer to the latest GST notifications from the Central Board of Indirect Taxes and Customs (CBIC).