2019 (10) TMI 1234 - AAR - GST

Classification of goods - disposable underpads which is used by bed ridden patients to protect skin from moisture - whether falls under HSN tariff item 9619.00.90 or not? - HELD THAT - The disposable underpad is functionally similar to sanitary towels as both are responsible for absorbing body fluids and keeping the respective body parts dry Therefore, the product is appropriately classifiable under HSN 9619 00 90 - Others - The product attracts 12% GST Sl.No.235 of Schedule II of Notification no.01/2017 -Central Tax (Rate) dtd.28-06-2017 and SRO.No,360/2017 .

Summary

Issues involved: Classification of disposable underpads under the HSN tariff item 9619.00.90 and determination of applicable GST rate.

Classification Issue Analysis:
The applicant, a manufacturer of disposable underpads, sought an advance ruling to determine whether their product falls under the HSN tariff item 9619.00.90. The disposable underpads are designed to absorb fluids, keep the covered area dry, and are commonly used in hospitals for patients facing mobility challenges. The underpads consist of materials that prevent re-wetting of the skin and incorporate a water-proof non-slip backing to prevent movement. The applicant argued that the product should be classified under HSN 9619, which covers sanitary towels, pads, tampons, napkins, and similar articles made of any material.

The Authority for Advance Ruling examined the nature and function of the disposable underpads in detail. It was determined that the underpads serve a similar function to sanitary towels by absorbing body fluids and maintaining dryness. Consequently, the product was deemed appropriately classifiable under "HSN 9619 00 90 - Others." The ruling clarified that the disposable underpads manufactured by the applicant indeed fall under HSN tariff item 9619.00.90, specifically categorized as "Sanitary towels (pad) and tampons, napkins and napkin liners for babies and similar articles of any material."

GST Rate Issue Analysis:
Regarding the applicable GST rate for the classified product, the ruling specified that disposable underpads attract a 12% GST rate. This determination was based on Schedule II of Notification no.01/2017 - Central Tax (Rate) dated 28-06-2017 and SRO.No.360/2017. The ruling provided clear guidance on the GST implications for the disposable underpads falling under the HSN tariff item 9619.00.90, ensuring compliance with the relevant tax regulations.

In conclusion, the Advance Ruling Authority for Kerala decisively addressed the classification and GST rate issues concerning the disposable underpads manufactured by the applicant, offering a comprehensive analysis and providing specific rulings to guide the applicant's future operations within the regulatory framework.