Clarification regarding GST rate on imitation zari thread or yarn based on the recommendation of the GST Council in its 52nd meeting held on 07.10.2023 - GST - States - 150/2023-GST

GOVERNMENT OF ASSAM OFFICE OF THE PRINCIPAL COMMISSIONER OF STATE TAX CUM COMMISSIONER OF TAXES, ASSAM KAR BHAWAN DISPUR, GUWAHAT1-6 CIRCULAR NO. 150/2023-GST Dated Dispur the 6th November, 2023. Subject: Clarification regarding GST rate on imitation zari thread or yarn based on the recommendation of the GST Council in its 52 nd meeting held on 07.10.2023 reg. No. CT/GST-15/2017/908. The GST Council in its 50th meeting had recommended reduction of GST rate to 5% on imitation zari thread or yarn known by any name in trade parlance, following which Sl.No. 218AA had been inserted in Schedule I of notification no. 1/2017- State Tax (Rate) dated 29.6.2017. 2. Doubts have been raised whether metal coated plastic film converted to metallised yarn and twisted with nylon, cotton, polyester or any other yarn to make imitation zari thread is covered under SI No. 218AA of Schedule I covering imitation zari thread or yarn, and attracting 5% GST, or under Sl No. 137 of Schedule Ill covering other metallised yarn attracting 12% GST. As per HS Explanatory Notes, the heading 5605 covers (1) yarn consisting of any textile material (including monofilament, strip and the like and paper yarn) combined with metal thread or strip, whether obtained by a process of twisting, cabling or by gimping, whatever the proportion of the metal present (2) yarn of any textile material (including monofilament, strip and the like and paper yarn) covered with metal by any other process including yarn covered with metal by electro-deposition. The heading also covers products consisting of a core of metal foil (generally of aluminum) or of a core of plastic film coated with metal dust, sandwiched by means of an adhesive between two layers of plastic film. 3. In light of the above, the GST Council has recommended to clarify that imitation zari thread or yarn made from metallised polyester film/ plastic film falling under HS 5605 are covered by Sl No. 218AA of Schedule I attracting 5% GST. The GST Council has also recommended that no refund will be permitted on polyester film (metallised)/plastic film on account of inversion of tax rate. Requisite changes are being made in notification no. 5/2017-State Tax (Rate) vide Notification no 20/2023-State Tax (Rate). 4. This Circular is clarificatory in nature and not meant for any interpretation of provisions of the Act and rules. 5. Difficulties, if any, in implementation of the above instructions may be brought to the notice of the Commissioner at an early date. 6. This Circular shall be deemed to have been issued on 31st October, 2023. Sd/- ( Rakesh Agarwala, IAS.,) Principal Commissioner of State Tax, Assam, Dispur, Guwahati