2019 (2) TMI 1606 - AAR - GST

Classification of goods - Bags/Sacks (both with without Handle) made of (i) Laminated P.P. Non-woven Fabric, (ii) B.O.P.P. Pasted P.P. Non-woven Fabric and (iii) Woven Fabric Pasted with Non-woven Fabric - Held that - HS Code 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 - Regarding Bags/Sacks made of Woven Fabric Pasted with Non-woven Fabric the Applicant has not stated the constituting materials of the fabric and hence, in the absence of any definite material mentioned for the fabric, the General Rules for the Interpretation of the First Schedule of the Customs Tariff, which has been adopted by GST have to be referred to.

Summary

Issues:
1. Admissibility of the Application
2. Submissions of the Applicant
3. Submissions of the Revenue
4. Observation & Finding of the Authority

Admissibility of the Application:
The Applicant, a manufacturer of various fabrics and bags/sacks, sought a ruling on the description and HSN of bags/sacks made of different materials under the GST Act. The application was found admissible under Section 97(2)(a) as the question raised was not decided or pending before any authority. The officer concerned raised no objection to the admission of the application, leading to its acceptance.

Submissions of the Applicant:
The Applicant discussed the classification of fabrics manufactured by them but remained silent on the description and HSN of bags/sacks. They referred to an AAR Order from Kerala for the classification of non-woven bags/sacks under Chapter Heading 63 of the GST Tariff.

Submissions of the Revenue:
The Revenue cited a circular clarifying the classification of bags made of different materials under specific HS codes. They referred to Notification No. 01/2017-Central Tax (Rate) for bags made of woven fabric pasted with non-woven fabric.

Observation & Finding of the Authority:
The Authority focused the discussion on bags/sacks only, not on fabric classification. They mentioned the AAR Order from Kerala for the classification of carry bags made of P.P. Non-woven fabrics under Chapter 63. The TRU clarification classified bags differently based on materials used, with specific HS codes and GST rates. Bags made of woven fabric pasted with non-woven fabric required classification based on the General Rules for the Interpretation of the Customs Tariff.

The ruling classified bags/sacks made of different materials under specific sub-headings and HS codes, ensuring validity subject to relevant provisions of the GST Act.