2023 (8) TMI 927 - AAR - GST

Classification of goods - HSN Code - billing of Foam Cup Pads, as finished products, which is supplied to manufacture brassier (ladies bra) by manufacturers - to be classified under HSN Code 39269079 or 62129090? - HELD THAT - Since, the foam pad cup by character is an insulating liner made of polyutherane foam, hence the product in question does not merit classification under Chapter 62 - Accordingly, the product is classified under heading 3926. The applicant has also requested to know whether the 'Foam cup pads' manufactured by them can be classified under HSN 39269079 - HELD THAT - The description of heading 39269079 pertains to 'Plastic or nylon tipped hammers; insulating liner of nylon'. The product in question possesses the essential character of insulating liner made of polyutherane foam. Since polutherane foam is the basic material used in manufacture of the foam cup pads, the same cannot be considered as insulating liner of nylon to merit classification under heading 39269079. The applicant has also requested to know whether the 'Foam cup pads' manufactured by them can be classified under HSN 39262091 - HELD THAT - The description of heading 39262091 pertains to Articles of apparel and clothing accessories (including gloves, mittens and mitts), of polyurethane foam. Since, the product is essentially - article of plastics/and articles of other materials of headings 3901 to 3914, articles of apparel and clothing accessories, and made of polyutherane foam. Hence the product will be classified under HSN Code 39262091 on merit. Thus, the 'Foam cup pad' made of polyurethane, glue and fabric, is to be classified under heading 39262091 and is liable to GST @ 18%.

Summary

Issues Involved:
The classification of goods under the CGST Act and UPGST Act for Foam Cup Pads supplied to brassiere manufacturers.

Issue 1: Classification of Goods under HSN Code

Details:
The applicant sought an advance ruling to confirm the exact HSN code for billing Foam Cup Pads supplied to manufacture brassieres. The applicant invoiced the goods under HSN code 39269079 at 18% GST rate, considering the foam pad cup as an insulating liner made of polyurethane foam. However, a recent rejection by a customer highlighted that other manufacturers classified similar products under HSN Code 62129090 or 39262091 at a 5% rate.

Discussion:
The jurisdictional officer explained that the foam cup pads made by the applicant, primarily from polyurethane, glue, and fabric, do not fit under HSN Code 62129090 for brassieres or 39262091 for plastic articles. Instead, the product aligns with HSN Code 39269079, which covers articles of plastics and other materials, including insulating liners. During the personal hearing, the applicant reiterated their position.

Finding:
After analyzing the submissions and relevant tariff interpretation rules, the Authority concluded that the Foam Cup Pads should be classified under HSN Code 39262091, attracting an 18% GST rate (CGST @ 9% and SGST @ 9%). This ruling is specific to the jurisdiction of the Authority for Advance Ruling Uttar Pradesh.

Conclusion:
The ruling confirmed that the Foam Cup Pads should be billed under HSN Code 39262091 for further use in manufacturing brassieres, aligning with the applicant's production process and materials used.