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2019 (1) TMI 487 - AAR - GSTClassification of goods - PP Non-woven bags - whether classifiable under Tariff Head 6305 90 00 of the GST Tariff which is aligned to the First Schedule of the Customs Tariff Act, 1975 or otherwise? - Held that - The IOSR Journal of Polymer and Textile Engineering (IOSRJPTE), Volume 3, Issue 5 (Sep-Oct, 2016), PP 08-14 www.iosrjournals.org explains that Polypropylene (PP) is the homo-polymer that is widely used for the production of non woven fabric. Polypropylene sheets are stitched into bags. Note 1 to Chapter 39 of the GST Tariff clarifies that throughout the nomenclature the expression plastics means those materials of headings 39.01 to 39.14 (Primary forms of Polypropylene is classified under HSN 3902) which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Polypropylene sheets are, therefore, plastic, bags made from Polypropylene sheets are to be classified as plastic goods under Chapter 39. Sub-heading 3923 29 covers articles of conveyance or packing of goods, namely sacks and bags, made of plastics other than polyethylene. Polypropylene Non-Woven Bags that the Applicant manufactures are, therefore, classifiable under Sub-heading 3923 29. Ruling - PP Non-woven Bags , specifically made from non woven Polypropylene fabric are plastic goods to be classified under Sub Heading 3923 29 and taxed at 18 % rate under Serial No. 108 of Schedule III of Notification no. 01/2017-C.T (Rate) dated 28-06-2017 under the CGST Act, 2017 Notification No. 1125-FT dated 28/06/2017 under the WBGST Act, 2017.
Issues: Classification and Rate of Tax Applicable on Polypropylene Non-Woven Bags under the CGST/WBGST Acts
Issue 1: Admissibility of Advance Ruling The Applicant seeks a ruling on the classification and tax rate of Polypropylene Non-Woven Bags under the CGST/WBGST Acts. The Advance Ruling Authority finds the application admissible under relevant sections of the GST Act as the question raised has not been previously decided. Issue 2: Classification of Goods The Applicant claims that Polypropylene Non-Woven Bags are classifiable under Tariff Head 6305 90 00 of the GST Tariff. Various orders and articles are submitted to support this classification, including references to similar products in Kerala. Issue 3: Manufacturing Process and Raw Materials The Authority notes a lack of detailed information regarding the raw materials and manufacturing process of the bags. However, based on submitted articles and samples, it is inferred that the bags are made from Polypropylene granules bonded to form sheets and then stitched into bags. Issue 4: Registration and Relevance of References The Applicant's references to registrations and communications are deemed insufficient as specific details and copies are not provided. The relevance of certain communications is questioned due to lack of supporting documentation. Issue 5: Comparison with Previous Ruling The Applicant's product is compared to a previous ruling involving similar manufacturing processes and materials. Based on this comparison and the submitted sample, it is assumed that the bags are made from Polypropylene and classified as plastic goods. Issue 6: Classification under GST Tariff The Authority determines that the bags are not made from Polypropylene strips but sheets, leading to a classification under Sub-heading 3923 29 as plastic goods. This classification aligns with the nature of the manufacturing process and materials used. Issue 7: Application of Previous Judgments A judgment regarding the classification of HDPE bags as plastic goods is referenced to support the classification of Polypropylene Non-Woven Bags. The ruling concludes that bags made from Polypropylene sheets are to be classified as plastic goods under Chapter 39. Issue 8: Final Ruling The Authority rules that 'PP Non-woven Bags' made from non-woven Polypropylene fabric are to be classified as plastic goods under Sub Heading 3923 29 and taxed at an 18% rate under specific notifications of the CGST and WBGST Acts. This ruling is deemed valid unless declared void under relevant provisions of the GST Act.
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