This advisory clarifies the GST compliance requirements for traders in the wood industry, including manufacturers, suppliers, and retailers.

1. GST Registration: Businesses in the wood industry (e.g., manufacturers, suppliers, retailers) need to register for GST if their total sales exceed certain thresholds (₹40 lakhs for goods or ₹20 lakhs for services). If registered, businesses must collect and pay GST on sales.
2. Composition Scheme: Small businesses with annual turnover up to ₹1.5 crores (for goods) or ₹50 lakhs (for services) can opt for a simpler scheme called composition scheme where they pay a fixed rate of tax (1% for goods, 3% for services). However, they can’t claim input tax credit (ITC) and can’t engage in interstate outward supply.
3. Tax Rates: There are specific tax rates for wood products like firewood (0%), wood chips (5%), and plywood (18%).

4. Input Tax Credit (ITC): Businesses can claim credit for the GST they’ve already paid on inputs (like raw materials) used for their business. To claim this, they need a valid invoice and the supplier must have paid their taxes.
5. Filing Returns: Businesses registered under GST need to file periodic returns (GSTR-1, GSTR-3B for regular businesses or GSTR-4 for those using the Composition Scheme).
6. E-Way Bill: Businesses must generate an e-way bill for the transportation of wood-related goods worth ₹50,000 or more. If the goods are moved interstate for job work, an e-way bill is required.
7. Non-Compliance: If businesses fail to file returns for 6 months, their GST registration may be suspended or cancelled. Other penalties can include fines and interest on unpaid taxes.
8. Documents for Goods Transfer: Depending on the type of transaction (sale, purchase, job work), businesses need to provide specific documents, such as invoices, bills, and e-way bills, when transferring goods.