2018 (12) TMI 710 - AAAR - GST

Classification of goods - HIDPE Woven Tarpaulin - whether classified under HSN 6306 of GST tariff? - Held that - In view of the Note 1(h) to Section XI of the GST Tariff Act, the tarpaulins of IIDPE woven fabrics, laminated as per specification of IS 7903 2017, being expressly excluded, do not merit classification under Chapter 63. Ruling of the West Bengal Authority for Advance Ruling pronounced, 2018 (8) TMI 874 - AUTHORITY FOR ADVANCE RULINGS WEST BENGAL 2018 (8) TMI 874 - AUTHORITY FOR ADVANCE RULINGS WEST BENGAL , is upheld in its entirety. Appeal disposed off.

Summary

Issues:
Classification of "HDPE Woven Tarpaulin" under HSN 6306 of GST tariff.

Detailed Analysis:

1. Background and Appeal: M/s. East Hooghly Polyplast Pvt. Ltd. appealed against the Advance Ruling No. 12/WBAAR/2018-19 dated 20.07.2018 by the West Bengal Authority for Advance Ruling (AAR). The company sought clarification on whether "HDPE Woven Tarpaulin" should be classified under HSN 6306 of the GST tariff.

2. AAR Ruling: The AAR, after considering relevant Section Notes of the Tariff Act and BIS specifications, ruled that "Tarpaulins made of HDPE woven fabrics" do not fall under HSN 6306 of the GST Tariff. The GST Tariff aligns with the First Schedule of the Customs Tariff Act, 1975.

3. Grounds of Appeal: The Appellant contested the AAR's decision on various grounds, including the classification of tarpaulin under Chapter 63 based on the manufacturing process and materials used. They argued that the product should be classified under Textiles rather than Plastics as per IS standards.

4. Appellant's Arguments: The Appellant emphasized that the tarpaulins were made from HDPE woven fabric for agricultural and disaster management purposes. They detailed the manufacturing process involving HDPE tapes conforming to BIS standards and lamination with LDPE or LLDPE as per IS specifications.

5. AAR Observations: The AAR noted that the width of tapes used for weaving, lamination process, and compliance with IS standards were crucial factors for classification. They highlighted that the tarpaulin in question was laminated with LLDPE, making it ineligible for classification under Chapter 63.

6. Conclusion: Considering the provisions of Note 1(h) to Section XI of the GST Tariff Act, the AAR upheld its ruling that tarpaulins made from HDPE woven fabrics and laminated as per IS 7903:2017 do not qualify for classification under Chapter 63. The appeal by M/s. East Hooghly Polyplast Pvt. Ltd. was dismissed, and the AAR's decision was deemed correct and justified.

7. Disposition: The judgment confirmed the ruling of the West Bengal Authority for Advance Ruling, emphasizing the importance of the lamination process in determining the classification of tarpaulins. The decision was communicated to both the Appellant and the Respondent for information.