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2019 (3) TMI 832 - AAR - GSTClassification of goods - rate of tax - Wet Baby Wipes - Wet Face Wipes - Bed and Bath Towels - Shampoo Towels - Held that - The relevant Chapter Notes and Explanatory Notes of HSN indicates that if non-woven are impregnated, coated or covered with perfume or cosmetic, the product would fall under Chapter Heading 3307 and in case such non-woven are impregnated, coated or covered with soap or detergent, the product would fall under Chapter Heading 3401 - These products would also not fall under Chapter Heading 4818 as the said heading covers the products of paper, cellulose wadding etc. and not of non-wovens - also, Chapter Heading 9619 covers Sanitary towels (pads) and tampons, napkins and napkin liners for babies and similar articles, of any material which heading does not specifically cover the aforesaid products. Thus, the products (a) Wet Baby Wipes, (b) Wet Face Wipes, (c) Bed and Bath Towels and (d) Shampoo Towels are appropriately classifiable under Heading 3307 or 3401 depending upon their constituents. If these products are impregnated with perfumes or cosmetics, the same would fall under HS code 3307 and if they are coated with soap or detergent, then it would fall under HS code 3401 - GST rate prescribed for the applicable HS code shall be charged under Central Goods Services Tax Act, 2017 and Gujarat Goods Services Tax Act, 2017 and notifications issued thereunder.
Issues Involved:
1. Classification of Wet Baby Wipes under GST. 2. Classification of Wet Face Wipes under GST. 3. Classification of Bed and Bath Towels under GST. 4. Classification of Shampoo Towels under GST. Detailed Analysis: Issue 1: Classification of Wet Baby Wipes under GST The applicant, M/s. Ginni Filaments Limited, is uncertain about the classification of Wet Baby Wipes due to overlapping entries in the GST Schedules. The relevant HSN codes considered include 3307, 3401 30, 3402, 4818, 5603, and 9619. The applicant argues that Wet Baby Wipes, being nonwovens used for cleansing baby’s delicate skin, may fall under multiple categories. The applicant seeks clarity on the correct HSN code and GST rate. After examining the composition, size, and use of Wet Baby Wipes, it was found that the product is manufactured using non-woven spun lace fabrics impregnated with various ingredients that act as humectants, preservatives, moisturizers, surfactants, and fragrances. The product is used for cleansing and moisturizing baby's skin. The Authority concluded that these ingredients are more in the nature of cosmetics or perfumes rather than soaps or detergents. Therefore, Wet Baby Wipes are classified under Chapter Heading 3307 if impregnated with perfumes or cosmetics, and under Chapter Heading 3401 if coated with soap or detergent. Issue 2: Classification of Wet Face Wipes under GST Similar to Wet Baby Wipes, the applicant is uncertain about the classification of Wet Face Wipes due to overlapping HSN entries. The relevant HSN codes considered include 3307, 3401 30, 3402, 4818, and 5603. The applicant seeks clarity on the correct HSN code and GST rate. Upon examining the composition, size, and use of Wet Face Wipes, it was found that the product is manufactured using non-woven spun lace fabrics impregnated with ingredients that act as chelating agents, moisturizers, humectants, nourishing and soothing agents, emulsifying agents, surfactants, and fragrances. The product is used for removing dirt and grime from the face. The Authority concluded that these ingredients are more in the nature of cosmetics or perfumes rather than soaps or detergents. Therefore, Wet Face Wipes are classified under Chapter Heading 3307 if impregnated with perfumes or cosmetics, and under Chapter Heading 3401 if coated with soap or detergent. Issue 3: Classification of Bed and Bath Towels under GST The applicant reiterated the submissions made for Wet Face Wipes and requested clarity on the classification and GST rate for Bed and Bath Towels. The relevant HSN codes considered include 3307, 3401 30, 3402, 4818, and 5603. Upon examining the composition, size, and use of Bed and Bath Towels, it was found that the product is manufactured using non-woven spun lace fabrics impregnated with ingredients that act as solvents, anti-bacterial agents, preservatives, moisturizers, solubilizers, cleansing agents, skin conditioners, fragrances, chelating agents, and buffering agents. The product is used for cleaning and moisturizing the skin, especially for bedridden persons. The Authority concluded that these ingredients are more in the nature of cosmetics or perfumes rather than soaps or detergents. Therefore, Bed and Bath Towels are classified under Chapter Heading 3307 if impregnated with perfumes or cosmetics, and under Chapter Heading 3401 if coated with soap or detergent. Issue 4: Classification of Shampoo Towels under GST The applicant reiterated the submissions made for Wet Face Wipes and drew attention to HSN code 3305 for Shampoo Towels. The relevant HSN codes considered include 3307, 3401 30, 3402, 4818, 5603, and 3305. Upon examining the composition, size, and use of Shampoo Towels, it was found that the product is manufactured using non-woven spun lace fabrics impregnated with ingredients that act as solvents, preservatives, anti-bacterial agents, fragrances, hair conditioners, foaming agents, solubilizers, chelating agents, and buffering agents. The product is used for cleansing hair without the need for water. The Authority concluded that these ingredients are more in the nature of cosmetics or perfumes rather than soaps or detergents. Therefore, Shampoo Towels are classified under Chapter Heading 3307 if impregnated with perfumes or cosmetics, and under Chapter Heading 3401 if coated with soap or detergent. Ruling: 1. The products (a) Wet Baby Wipes, (b) Wet Face Wipes, (c) Bed and Bath Towels, and (d) Shampoo Towels supplied by M/s. Ginni Filaments Limited are appropriately classifiable under Heading 3307 or 3401 depending upon their constituents. If these products are impregnated with perfumes or cosmetics, they fall under HS code 3307. If they are coated with soap or detergent, they fall under HS code 3401. 2. The GST rate prescribed for the applicable HS code shall be charged under the Central Goods & Services Tax Act, 2017 and Gujarat Goods & Services Tax Act, 2017 and notifications issued thereunder.
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