2019 (2) TMI 831 - AAR - GST

Request for withdrawal of Advance Ruling application - Applicant has not submitted requisite fee for advance ruling - Classification of goods - quilt (other than cotton quilt). Held that - Since the applicant withdrew the application, therefore no ruling is given.

Summary

Issues: Classification of quilts for GST purposes

Issue 1: Submission of the Applicant
The applicant, engaged in manufacturing and sales of fabrics, home furnishings, and apparels, sought an advance ruling for the classification of quilts. The manufacturing process involves cutting fabric and lining material, stitching them together, inserting a fiber sheet, and stitching the quilt cover using a multi-needle machine. The applicant classified cotton quilts based on their sale value as per specific schedules under GST, while other quilts were classified under a separate category applying GST at 12%.

Issue 2: Interpretation of Exemption Notification
The applicant referred to a Ministry of Finance clarification stating that quilts classified under heading 9404 are considered as "products wholly made of quilted textile materials" and are eligible for exemption under a specific notification. The clarification emphasized that eligibility for the exemption is based on the character of the finished product, not the manufacturing process. Any interpretation linking the exemption to the manufacturing process would render the notification unworkable.

Issue 3: GST Notifications and Classification
The applicant highlighted a GST notification that excluded quilts as "products wholly made of quilted textile material" from a specific category, indicating that these quilts should be classified under Schedule II at a particular rate of GST. The applicant sought a ruling on the proper classification of quilts other than cotton quilts, whether under Schedule II at 12% GST or under Schedule III at 18% GST.

Findings and Conclusion
The applicant failed to submit the requisite fee for the advance ruling, prompting a request for fee deposition. Subsequently, the applicant requested withdrawal of the advance ruling application even before the scheduled personal hearing. Considering the applicant's withdrawal, the authority did not provide a ruling on the classification of quilts for GST purposes.

The judgment underscores the importance of compliance with procedural requirements for seeking advance rulings and the significance of understanding the legal interpretations and implications of relevant notifications for proper classification under GST.