2021 (12) TMI 38 - AAR - GST

Classification of goods - HSN Code - baby wipes - rate of tax to be levied on baby wipes - If Circular No.52/ 26/ 2018 GST-dated 9th August 2018, is not applicable to the applicant, whether the applicant can go back and charge GST @ 12% since there exists ambiguity in this regard? - HELD THAT - Circular No.52/26/2018-GST dated 09.08.2018 clarifies that the classification of baby wipes depends on their constituents; they are classifiable under tariff heading 3307 if they are impregnated with perfumes or cosmetics and if they are coated with soap or detergent they would fall under tariff heading 3401; they would attract 18% GST in both cases. The Tariff heading 9619 covers articles having multiple layers designed to absorb and store fluid. Generally, these articles are shaped so as to fit snugly to human body. In the instant case, the impugned article- baby wipes' are neither designed to absorb and store fluids nor are shaped to fit human body and hence cannot be classified under tariff heading 9619 - the product baby wipes merits classification under tariff heading 3307 and attract 18% GST, in terms of Circular dated 09.08.2018. The Circular No.52/ 26/2018 GST-dated 9th August 2018, is applicable to the applicant.

Summary

Issues:
Classification of baby wipes under HSN Code, Rate of tax on baby wipes, Applicability of Circular No.52/26/2018-GST.

Classification of Baby Wipes:
The applicant, engaged in import and trading of baby wipes, sought advance ruling on the HSN Code and GST rate for baby wipes. The applicant had been classifying the wipes under Tariff Heading 96190010 but started charging 18% GST post a circular issued by CBIC. The Authority analyzed the constituent components of baby wipes and referred to the Circular which clarified that wipes impregnated with perfumes or cosmetics fall under 3307 and those coated with soap or detergent fall under 3401, attracting 18% GST. The Authority ruled that baby wipes are appropriately classified under heading 3307 and attract 18% GST.

Rate of Tax on Baby Wipes:
The core issue was to determine the applicable rate of GST on baby wipes. The Authority referred to the Circular which specified that baby wipes impregnated with perfumes or cosmetics fall under 3307 and those coated with soap or detergent fall under 3401, both attracting 18% GST. The ruling stated that the applicable rate of tax (GST) on baby wipes is 18%.

Applicability of Circular No.52/26/2018-GST:
The applicant questioned the applicability of Circular No.52/26/2018-GST dated 9th August 2018 and whether they could revert to charging GST at 12%. The Authority analyzed the circular, which clarified the classification based on constituents. The ruling stated that the circular is applicable to the applicant, and they must continue charging GST at 18%.

The ruling clarified the classification of baby wipes under heading 3307, the applicable rate of tax at 18%, and upheld the applicability of Circular No.52/26/2018-GST. The decision was based on the constituent components of the wipes as per the Circular's guidelines, ensuring proper classification and tax treatment.