2020 (7) TMI 109 - AAR - GST

Classification of goods - rate of GST - Knitted Fabrics - Woven Fabrics - Woven Fabric bonded with Non-woven Fabric - Covers for pillow, latex block, mattresses - Foot Runner - Pillow Sheet - Chenille Yarn - Poly Propylene Extrusion Yam - Poly Propylene Texturized Yarn - Polyester Texturized Yarn. Knitted Fabrics - HELD THAT - Knitted Fabrics manufactured and Supplied by the applicant is classifiable under CTH 60. Further classification is not possible as only further technical details are not provided. The applicable rate is 2.5% CGST provided vide Sl.No.221 of Schedule I of Notification 1/2017 CT(R) dated 28.06.2017 as amended and 2.5% SGST provided vide S.No. 221 of Schedule I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No.62 dated 29.06.2017. Woven fabric - HELD THAT - Woven fabric manufactured and supplied by the applicant is classified under CTH 5407. Further classification is not possible as only further technical details are not provided The applicable rate is 2.5% CGST provided vide SI.No.217 of Schedule I of Notification 1/2017 CT( R) dated 28.06.2017 as amended and 2.5% SGST provided vide S.No. 217 of Schedule I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017. Woven Fabric backing with Non-woven Fabric falls under CTH 5407 - HELD THAT - Woven Fabric backing with Non-woven Fabric falls under CTH 5407. Further classification is not possible as only further technical details are not provided. The applicable rate is 2.5% CGST provided vide Sl.No.217 of Schedule I of Notification 1/2017 CT(R) dated 28.06.2017 as amended and 2.5% SGST provided vide S.No. 217 of Schedule I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017. Covers for pillows made of knitted or woven fabrics - HELD THAT - Covers for pillows made of knitted or woven fabrics are classifiable under CTH 63049239. Covers for latex blocks made of knitted or woven fabrics are classifiable under CTH 63049289. Cover for mattress made of knitted or woven fabrics are classifiable under CTH 63041990. The Goods attract CGST @ 2.5% in case selling price is less than ₹ 1000/piece as per SI.No.224 of Schedule I of Notification 1/2017 CT(R) dated 28.06.2017 as amended and SGST @2.5% in case selling price is less than ₹ 1000/ piece as per Sl.No. 224 of Schedule I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 and in case of selling price more than ₹ 1000/piece then it will attract 6% CGST as per S.No. 171 of Schedule II of Notification 1/2017 CT(R) dated 28.06.2017 as amended and SGST @6% as per S.No. 171 of Schedule II of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017. Foot runners - pillow sheet made of knitted or woven fabrics - HELD THAT - Foot runners, pillow sheet made of knitted or woven fabrics are classifiable under CTH 63021090. They will attract CGST @ 2.5% in case selling price is less than ₹ 1000/piece as per Sl.No.224 of Schedule I of Notification 1/2017 CT(R) dated 28.06.2017 as amended and SGST 42.5% in case selling price is less than ₹ 1000/ piece as per Sl.No. 224 of Schedule I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No.62 dated 29.06.2017 and in case of selling price more than ₹ 1000/piece then it will attract 6% CGST as per S.No. 171 of Schedule II of Notification 1/2017 CT(R) dated 28.06.2017 as amended and SGST @6% as per S.No. 171 of Schedule II of Notification Ms. No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017. Chenille yarn made of Polyester - HELD THAT - Chenille yarn made of Polyester is classifiable under CTH 56060020. The applicable rate of CGST is 6% as per SI.No.138 of Schedule II of Notification 1/2017 CT(R) dated 28.06.2017 as amended and SGST -6% as per S.No. 138 of Schedule II of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017. Poly Propylene Extrusion Yarn - Poly Propylene Texturized Yarn - Polyester Texturized Yarn - HELD THAT - Poly Propylene Extrusion Yarn Poly Propylene Texturized Yarn; Polyester Texturized Yarn are synthetic yarns classifiable under CTH 5402 when not put up for retail sale and under CTH 5406 when put up for retail sale. The applicable rate of tax is CGST @ 9% vide S.No. 159 of Schedule III of Notification 1/2017 CT(R) dated 28.06.2017 and SGST 9% vide S.No.159 of Schedule III of Notification No. II (2)/CTR/532(d-4)/2017 vide G.O. Ms No. 62 dated 29.06.2017 up to 12 th October 2017 and thereafter leviable to CGST @ 6% as per Sl. No. 132B of Schedule -II of Notification No. 01/2017-CT (R) dated 28.06.2017 as amended by Nation No. 34/2017-C.T. (R) dated 13 th October 2017 and SGST @ 6% as per Sl.132B of Schedule -II of Notification No. II(2)/CTR/532(d-41/2017 vide G.O. (Ms No. 62 dated 29.06.2017 as amended.

Issues Involved:
1. Classification and rate of GST applicable on Knitted Fabrics.
2. Classification and rate of GST applicable on Woven Fabrics.
3. Classification and rate of GST applicable on Woven Fabric bonded with Non-woven Fabric.
4. Classification and rate of GST applicable on Covers for pillow, latex block, mattresses.
5. Classification and rate of GST applicable on Foot Runner and Pillow Sheet.
6. Classification and rate of GST applicable on Chenille Yarn.
7. Classification and rate of GST applicable on Poly Propylene Extrusion Yarn.
8. Classification and rate of GST applicable on Poly Propylene Texturized Yarn.
9. Classification and rate of GST applicable on Polyester Texturized Yarn.

Detailed Analysis:

1. Knitted Fabrics:
The applicant manufactures Knitted Fabrics using yarns of polyester, cotton, and polypropylene. The process involves interloping yarns through loop formation in Jacquard Knitting Machines, followed by softening with chemicals and inspection before dispatch. The product is classified under CTH 60 as it is not covered by the exclusions of Chapter 60. The applicable rate is 2.5% CGST and 2.5% SGST.

2. Woven Fabrics:
The raw materials used are polyester, POY, and chenille yarns. The process includes warping, weaving on Jacquard machines, and softening by needle punching. The product is classified under CTH 5407 as Woven Fabrics of Synthetic Filament Yarn. The applicable rate is 2.5% CGST and 2.5% SGST.

3. Woven Fabric Bonded with Non-woven Fabric:
The woven fabric is bonded with non-woven polypropylene fabric using heated licocene glue. The product is classified under CTH 5407 as the predominant material is woven fabric. The applicable rate is 2.5% CGST and 2.5% SGST.

4. Covers for Pillow, Latex Block, Mattresses:
These items are made using knitted or woven fabrics, cut to specifications, and assembled with accessories like zippers and labels. They are classified under Chapter 63 as made-up articles. Specifically, covers for pillows are classified under CTH 63049239, latex block covers under CTH 63049289, and mattress covers under CTH 63041990. The applicable rate is 2.5% CGST and 2.5% SGST if the selling price is less than ?1000/piece, and 6% CGST and 6% SGST if the selling price is more than ?1000/piece.

5. Foot Runner and Pillow Sheet:
Made from woven and paper silk fabrics, these items undergo embroidery, cutting, and stitching. They are classified under CTH 63021090 as made-up articles. The applicable rate is 2.5% CGST and 2.5% SGST if the selling price is less than ?1000/piece, and 6% CGST and 6% SGST if the selling price is more than ?1000/piece.

6. Chenille Yarn:
The process involves using core and pile yarns to produce chenille yarn, which is then dyed and tested. Classified under CTH 56060020, the applicable rate is 6% CGST and 6% SGST.

7. Poly Propylene Extrusion Yarn:
Manufactured by extruding polypropylene chips and granules, the yarn is wound on paper cones and tested. Classified under CTH 5402 when not put up for retail sale and CTH 5406 when put up for retail sale. The applicable rate is 9% CGST and 9% SGST up to 12th October 2017, and 6% CGST and 6% SGST thereafter.

8. Poly Propylene Texturized Yarn:
The process involves treating polypropylene fully drawn yarn with water and air jets, followed by winding and testing. Classified under CTH 5402 when not put up for retail sale and CTH 5406 when put up for retail sale. The applicable rate is 9% CGST and 9% SGST up to 12th October 2017, and 6% CGST and 6% SGST thereafter.

9. Polyester Texturized Yarn:
The process involves treating polyester partially oriented yarn with water and air jets, followed by winding and testing. Classified under CTH 5402 when not put up for retail sale and CTH 5406 when put up for retail sale. The applicable rate is 9% CGST and 9% SGST up to 12th October 2017, and 6% CGST and 6% SGST thereafter.

Rulings:
1. Knitted Fabrics: Classified under CTH 60. Applicable rate: 2.5% CGST and 2.5% SGST.
2. Woven Fabrics: Classified under CTH 5407. Applicable rate: 2.5% CGST and 2.5% SGST.
3. Woven Fabric bonded with Non-woven Fabric: Classified under CTH 5407. Applicable rate: 2.5% CGST and 2.5% SGST.
4. Covers for pillows, latex block, mattresses: Classified under CTH 63049239, 63049289, and 63041990 respectively. Applicable rate: 2.5% CGST and 2.5% SGST (selling price < ?1000/piece), 6% CGST and 6% SGST (selling price > ?1000/piece).
5. Foot Runner and Pillow Sheet: Classified under CTH 63021090. Applicable rate: 2.5% CGST and 2.5% SGST (selling price < ?1000/piece), 6% CGST and 6% SGST (selling price > ?1000/piece).
6. Chenille Yarn: Classified under CTH 56060020. Applicable rate: 6% CGST and 6% SGST.
7. Poly Propylene Extrusion Yarn, Poly Propylene Texturized Yarn, Polyester Texturized Yarn: Classified under CTH 5402 (not put up for retail sale) and CTH 5406 (put up for retail sale). Applicable rate: 9% CGST and 9% SGST (up to 12th October 2017), 6% CGST and 6% SGST (thereafter).

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