2019 (11) TMI 163 - AAR - GST

Classification of goods - PVC Tufted Coir Mats and Matting - HELD THAT - Coir mats, mattings and floor coverings covered under HSN 5702, 5703 and 5705 are taxable @ 5% GST vide Notification No.01/2017-CT (Rate) dated 28-06-2017 as amended by Notification No.34/2017- CT (Rate) dated 13-10-2017. This classification covers only the commodities which are manufactured exclusively using coir fiber. If any, PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under Customs Tariff Head 5703 90 90 and it will be taxed @ 12% GST. Whether or not item number (A)(xiii) in Schedule I - 2.5% (which reads as in Sl.No.219, in column (2), for the figure, 5702, 5703, 5705 , shall be substituted), referred to in Notification No.34/2017-Central Tax (Rate) dtd. 13-10-2017 is meant to cover PVC Tufted Coir Mats and Matting? - HELD THAT - PVC Tufted Coir Mats and Matting cannot be considered as textile of coir and floor coverings covered under HSN 5702, 5703 and 5705. If any, PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under the Customs Tariff Head 5703 90 90 and it will be taxed @ 12% GST as per Entry at Sl No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Whether or not PVC Tufted Coir Mats and Matting attracts low band tax rate of 5% as per the recommendations of the Fitment Committee and approval of the GST Council? - HELD THAT - PVC Tufted Coir Mats and Matting cannot be considered as textile of coir and floor coverings covered under HSN 5702, 5703 and 5705 and hence taxable @12% vide Customs Tariff Head 5703 90 90. Whether or not PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 20-carpets and floor coverings of coir (inserted vide Sl.No.9 (iii) of Notification No.109/2008-Customs (N.T) dtd.24-09-2008) corresponding to Entry Sl.No.219 of Schedule I attracting 5% GST? - HELD THAT - No, PVC Tufted Coir Mats and Matting cannot be classified under tariff item 5703 90 20-carpets and floor coverings of coir (inserted vide Sl.No.9 (iii) of Notification No.109/2008-Customs (N.T) dtd.24-09-2008) corresponding to Entry Sl.No.219 of Schedule I attracting 5% GST. Whether or not PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 90-of other textile material - other corresponding to entry in Sl.No.144 of Schedule II attracting 12% GST? - HELD THAT - Yes, PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 90-of other textile material - other corresponding to entry in Sl.No.144 of Schedule II attracting 12% GST. PVC Coir Mats Matting can be classified under tariff item 57050049/57050090-Carpets, carpeting, rugs, mats and matting-Other corresponding to Entry in Sl.No.219 of Schedule I attracting 5% GST? - HELD THAT - The PVC Tufted Coir Mats and Matting are classifiable under Customs Tariff Heading 5703 90 90 and attracts GST at the rate of 12% as per SI No. 144 of Schedule II of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.

Summary

Issues:
1. Classification of PVC tufted coir mats and matting under GST
2. Applicability of tax rates on PVC tufted coir mats and matting
3. Classification of PVC tufted coir mats and matting under different tariff items

Analysis:
1. The applicant sought clarification on the classification of PVC tufted coir mats and matting under GST. The Authority considered the manufacturing process involving advanced machines and materials like coir yarn, PVC resin, and fillers. It was noted that PVC tufted coir mats cannot be classified as coir mats covered under specific HSN codes. The ruling stated that if materials like PVC or rubber are added to coir textiles for floor mats, they fall under a different Customs Tariff Head and are taxed at 12% GST.

2. The issue of tax rates on PVC tufted coir mats and matting was examined in relation to the recommendations of the Fitment Committee and the GST Council. The ruling emphasized that these products do not qualify as coir textiles for the lower 5% tax rate. Instead, they are categorized under a different Customs Tariff Head, attracting a 12% GST rate.

3. The classification of PVC tufted coir mats and matting under different tariff items was scrutinized. It was clarified that these products cannot be classified under the specific tariff item for coir floor coverings attracting 5% GST. However, they were deemed to fall under the category of "other textile material" for which the applicable GST rate is 12%. The ruling specified the correct Customs Tariff Heading for PVC tufted coir mats and matting, ensuring they are taxed at the appropriate rate.

In conclusion, the Authority for Advance Ruling in Kerala determined the classification and tax treatment of PVC tufted coir mats and matting under the GST regime, providing detailed explanations for each issue raised by the applicant. The ruling clarified the distinctions between different categories of floor coverings and textiles, ensuring accurate taxation for PVC tufted coir products.