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2021 (1) TMI 428 - AAR - GSTClassification of goods - rate of duty - Zip Roll (i.e. Slide Fasteners) - Finished Zippers - Sliders- benefit of N/N. 01/2017-Central Tax (Rate) dated 28.06.2017 as amended by the Notification No.18/2018-Central Tax (Rate) dated 26.07.2018 - HELD THAT - The classification of goods under GST regime has to be done in accordance with the Customs Tariff Act 1975 which is in turn based on Harmonised System of Nomenclature popularly known as HSN . The rules of interpretation section notes and chapter notes as specified under the Customs Tariff Act 1975 are also applicable for classification of Goods under GST regime. However once an item is classified in accordance with the Customs Tariff Act 1975 the rate of tax applicable would be arrived at on the basis of notifications issued under GST by respective governments - In the instant case products in question are Zip Roll Sliders and Finished Zipper. The Customs Tariff classifies the products Slide Fasteners and Parts of Slide Fasteners under two different sub-headings viz. Slide Fasteners under chapter sub-heading 9607.11/9607.19 and Parts thereof under chapter sub-heading 9607.20. Further under GST the rate of tax is also separately prescribed for Slide Fasteners and Parts thereof. Hence it is necessary to decide first whether these products are Slide Fasteners or Parts of slide fasteners . It is found that the product Finished Zipper is supplied in cut length with sliders attached. The product Finished Zipper consists of two narrow strips of textile material. One edge of each strip is fitted with scoops of base metal (of metal plastics etc.) which can be made to interlock by means of slider or runner. Thus this a complete product which can be construed as Slide Fasteners - further it is noted that the product Zip Roll is supplied in continues length as per customer order or of normal length as per industrial specification. Zip Rolls are narrow strips of any length mounted with chain scoops and same are supplied without sliders/runners attached. Hence this product falls under Parts of slide fasteners and cannot be classified as Slide Fasteners as claimed by the applicant - slider shall be classified as Parts of slide fasteners under Chapter heading 9607.20. Thus the product Finished Zipper is to be classified as Slide Fasteners under Chapter heading 9607.11 and other products viz. Zip Roll and Slider are to be classified as Parts of slide fasteners under chapter heading No. 9607.20. Rate of GST leviable on Slide Fasteners and Parts of slide fasteners prevailing at different times - HELD THAT - W.e.f. 01.10.2019 Slide Fasteners and Parts of slide fasteners will again attract single rate of GST i.e. 12% - the product Finished Zipper shall be classified as Slide Fasteners under Chapter heading 9607.11 and Other products viz. Zip Roll and Slider merit classification as Parts of slide fasteners under chapter heading No. 9607.20. Accordingly the product Finished Zipper is liable to GST @ 18% till 26.07.2018 @ 12% from 27.07.2018 to 30.09.2018 and @ 12% from 01.10.2019 onwards. Whereas the other products viz. Zip Roll and Slider are liable to GST @ 18% till 30.09.2018 and @ 12% from 01.10.2019 onwards.
Issues Involved
1. Classification of products under HSN. 2. Applicable rate of tax for the products: Zip Roll, Finished Zippers, and Sliders. Detailed Analysis 1. Classification of Products under HSN Zip Roll (i.e., Slide Fasteners): - The applicant contended that Zip Rolls should be classified as "Slide Fasteners" under heading 9607. - However, the ruling determined that Zip Rolls, supplied in continuous length without sliders/runners attached, fall under "Parts of slide fasteners" and not as "Slide Fasteners." Finished Zippers: - Finished Zippers are supplied in cut length with sliders attached. - The ruling concluded that Finished Zippers are complete products and should be classified as "Slide Fasteners" under Chapter heading 9607.11. Sliders: - The applicant and the ruling both agree that Sliders should be classified as "Parts of slide fasteners" under Chapter heading 9607.20. 2. Applicable Rate of Tax for the Products Period from 01.07.2017 to 26.07.2018: - Both Slide Fasteners and Parts of Slide Fasteners were levied a single GST rate of 18% (CGST+SGST) under Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. Period from 27.07.2018 to 30.09.2019: - Notification No.18/2018-Central Tax (Rate) dated 26.07.2018 introduced different rates: - Slide Fasteners: 12% (CGST+SGST) - Parts of Slide Fasteners: 18% (CGST+SGST) From 01.10.2019 onwards: - Notification No.14/2019-Central Tax (Rate) dated 30.09.2019 amended the rates: - Both Slide Fasteners and Parts of Slide Fasteners attract a single GST rate of 12% (CGST+SGST). Conclusion Finished Zippers: - Classified as "Slide Fasteners" under Chapter heading 9607.11. - GST rates: - 18% till 26.07.2018 - 12% from 27.07.2018 to 30.09.2019 - 12% from 01.10.2019 onwards Zip Rolls and Sliders: - Classified as "Parts of slide fasteners" under Chapter heading 9607.20. - GST rates: - 18% till 30.09.2019 - 12% from 01.10.2019 onwards Ruling Question: What is the Classification as per HSN and rate of tax in terms of the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as amended by the Notification No.18/2018-Central Tax (Rate) dated 26.07.2018 in respect of their products, (i) The Zip Roll (i.e., Slide Fasteners), (ii) Finished Zippers, and (iii) Sliders? Answer: - Finished Zipper: Classified as "Slide Fasteners" under Chapter heading 9607.11. - GST: 18% till 26.07.2018, 12% from 27.07.2018 to 30.09.2019, 12% from 01.10.2019 onwards. - Zip Roll and Slider: Classified as "Parts of slide fasteners" under Chapter heading 9607.20. - GST: 18% till 30.09.2019, 12% from 01.10.2019 onwards.
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