2020 (6) TMI 484 - AAR - GST

Classification of goods - Fusible Interlining Fabrics of Cotton - whether classified under HSN Code 5903 or under chapter 52? - HELD THAT - On perusal of the Note 2 to Chapter heading 5903, it is found that the said heading covers textile fabrics, impregnated, coated, covered or laminated with plastics. Such products are classified here whatever the weight per square meter and whatever the nature of the plastic component (compact or cellular) provided that in the case of impregnation, coating or covered fabrics, impregnation, coating or covering can be seen with the naked eye. The textile fabrics in which impregnation, coating or covering cannot be seen with the naked eye usually fall in 50 to 55, 58 or 60. In the present case, it is found that the applicant in their submission has admitted that this coating pattern can be seen with the naked eye and the same fact is also confirm by the concerned officer of SGST-Uttarakhand in his report dated 30,01.2020, therefore the product in question merit classification under Chapter 5903 of GST Tariff Act, 2017. Thus, the Fusible Interlining Fabrics of Cotton (in short FIFC) is to be classified under HSN Code 5903 of GST Tariff Act, 2017.

Summary

Issues: Classification of Fusible Interlining Fabrics of Cotton under GST law

Issue 1: Classification under GST law
The application sought an advance ruling on whether Fusible Interlining Fabrics of Cotton (FIFC) should be classified under HSN Code 5903 or under chapter 52 based on the weightage of cotton in the fabrics. The Authority admitted the application under Section 97(2)(a) of the Act, allowing for classification of goods to be determined.

Issue 2: Submissions and Hearing
During the personal hearing, the applicant's representatives presented their case. The applicant classified the product under HSN 5903, applying 12% GST, while customers demanded classification under Chapter 52 with 5% GST. The applicant detailed the manufacturing process, emphasizing the cotton fabric with a powder dot coating process. The concerned officer confirmed the coating visibility on the fabric without the need for testing.

Issue 3: Legal Analysis
The relevant chapter note of CHAPTER 59 of the GST Tariff was examined. It was noted that fabrics falling under HSN 5903 are those where the impregnation, coating, or covering can be seen with the naked eye. Fabrics not meeting this criterion typically fall under other chapters. The applicant's admission and the officer's report confirmed the visibility of the coating, leading to the classification under Chapter 5903 of the GST Tariff Act, 2017.

Conclusion
The Authority ruled that Fusible Interlining Fabrics of Cotton should be classified under HSN Code 5903 of the GST Tariff Act, 2017.