2020 (6) TMI 483 - AAR - GST

Classification of goods - BOPP (Biaxially Oriented Polypropylene) Laminated PP Woven Sacks - Circular No. 80/54/2018-GST issued from F. No. 354/432/2018- TRU dated 31.12.2018 - HELD THAT - The issue has also been decided by Authority for Advance Ruling under GST, Madhya Pradesh in the case of IN RE M/S. NAGRANI WAREHOUSEING PRIVATE LIMITED 2019 (1) TMI 420 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH wherein it was ruled that the goods in question viz PP Woven Bags/Sacks shall be classifiable under Chapter 39 of the GST Tariff and not under Chapter 63. Since the decision of Hon ble High Court of Madhya Pradesh is crystal clear and squarely applicable in the present case, the goods in question are being held as classifiable under Chapter 39 of the GST Tariff and not 6305 of the GST Tariff.

Summary

Issues:
Classification of BOPP Laminated PP Woven Sacks under GST Tariff - Applicability of HS Code 3923 or 6305.

Analysis:

1. Classification Issue:
The primary issue in this case revolves around the classification of the product BOPP Laminated PP Woven Sacks under the GST Tariff. The applicant contended that their product should be classified under Tariff Chapter 63 with HSN Code 6305, emphasizing the technical textile nature of their woven sacks. They sought departmental confirmation for this classification.

2. Circular Clarifications:
Reference was made to Circular No. 80/54/2018-GST, which addressed the applicability of GST on Polypropylene Woven and Non-Woven Bags, including those laminated with BOPP. The circular clarified that such products would be classified as plastic bags under HS Code 3923, attracting an 18% GST rate. Non-laminated woven bags would be classified based on their constituting materials.

3. Precedent and Rulings:
The Authority for Advance Ruling under GST, Madhya Pradesh, in a previous case, classified PP Woven Bags/Sacks under Chapter 39 of the GST Tariff instead of Chapter 63. This decision was supported by a judgment of the Hon'ble High Court of Madhya Pradesh, emphasizing the classification of HDPE woven bags as goods of plastic. The Advance Ruling Authority also cited a Tribunal judgment classifying similar goods under chapter 39 instead of chapter 63.

4. Final Decision:
Considering the clarity and applicability of the High Court's decision from Madhya Pradesh, the Authority concluded that the BOPP Laminated PP Woven Sacks should be classified under Chapter 39 of the GST Tariff and not under Chapter 63. This decision was based on the interpretation of the manufacturing process and the material composition of the woven sacks, aligning with the legal precedents and rulings cited during the analysis.