2019 (1) TMI 1487 - AAR - GST

Classification of goods - Polypropylene Leno Bags - rate of tax - whether classified under Tariff sub-Heading No. 6305 33 00 of the GST Tariff or under Tariff sub-Heading No. 3923? - Held that - TRU clarification under Circular No. 80/54/2018-GST issued under F. No. 354/ 432/2018-TRU dated 31/12/2018 in Para 7, sub-Para 7.4 clarifies that Polypropylene woven and non-woven bags and PP woven and non-woven bags laminated with BOPP would be classified as plastic bags under HS Code 3923 and would attract 18% GST - HSN 3923 covers articles of the conveyance or packing of goods, of plastics; etc. Sub- Heading 39232990 is applicable for sacks and bags of plastics which are neither polymers of ethylene nor of poly-vinyl chloride and are subject to 18% GST. Ruling - Poly Propylene Leno Bags are to be classified as plastic bags under HSN 3923 and would attract 18% GST.

Summary

Issues: Classification and tax rate applicable on Polypropylene Leno Bags under the GST Act.

Classification Issue:
The Applicant, a manufacturer of Polypropylene Leno Bags, sought a ruling on the classification and tax rate applicable to the goods under the CGST/WBGST Acts. The Applicant argued that the bags should be classified under Tariff sub-Heading No. 6305 33 00 of the GST Tariff. The Applicant referred to previous rulings by the West Bengal Authority for Advance Ruling classifying similar bags under the same tariff sub-heading at a tax rate of 5%.

Legal Interpretation Issue:
The Tribunal considered the classification of Polypropylene Leno Bags under the GST Tariff. The Applicant's contention was that the bags should be classified under Tariff sub-Heading No. 6305 33 00. However, a TRU clarification under Circular No. 80/54/2018-GST stated that such bags would be classified as plastic bags under HS Code 3923 and attract 18% GST. The Tribunal analyzed the definitions and scope of both tariff sub-headings to determine the correct classification.

Ruling:
The Tribunal ruled that 'Poly Propylene Leno Bags' are to be classified as plastic bags under HSN 3923 and would attract 18% GST. This decision was based on the TRU clarification and the scope of the relevant tariff sub-headings. The ruling is valid subject to the provisions under Section 103 of the GST Act unless declared void under Section 104(1).

Conclusion:
In conclusion, the Tribunal resolved the classification and tax rate issue by determining that Polypropylene Leno Bags should be classified as plastic bags under HSN 3923, attracting an 18% GST rate. This ruling aligns with the TRU clarification and overrides the Applicant's argument based on previous rulings by the West Bengal Authority for Advance Ruling.