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TMI Blog2021 (3) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... EFT3643C1ZJ has filed an application on 23.05.2019 under section 97 of the CGST Act and the PGST Act, read with rule 104 of the Central Goods and Services Tax Rules, 2017 & Puducherry Goods and Services Tax Rules, 2017 in 'Form GST ARA-01' seeking an Advance Ruling on 'classification of PP Non-Woven Bags'. The applicant enclosed copy of challan as proof of payment of fee of Rs. 5,000/- for SGST vide CIN No. SBIN19053400009675 dated 23.05.2019 with the application and subsequently also made a payment of Rs. 5,000/- for CGST vide CIN No. HDFC20093400001009, dated 04.09.2020. The applicant submitted that the question raised in the application has neither been decided by nor is pending before any authority under any provisions of the CGST Act/ PGST Act. No objection to the admission of the application has been raised by the jurisdictional officer concerned. Hence, the application is admitted. The applicant has sought whether PP Non-woven bags (made Raw materials - PP granules (HSN 39021000) which are used for manufacture of Non-woven fabrics (HSN 5603) which are further used for manufacture of PP Non-woven bags by stitching) classifiable under HSN 63059000 or HSN 392329 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -woven and plastic. But the fact is, due to difference in the process and characteristic of the end product, there is substantial proof that it is not just another plastic. Polypropylene Non-woven, leaves no ecological footprint. It contributes to waste reduction and the movement away from one-use products, means that its ecological footprint, which is smaller than that of similar alternatives. The applicant admitted that Non-woven bags are made of polymers of polypropylene, but its properties are much different and definitely environment and pollution friendly than the so called plastic bags abundantly available in the market. 5.4. The applicant further gave a detailed summary about the scope for development of the industry due to the growing demand in the international market and finally concluded that the prime concern of their presentation is to prove Polypropylene (or PP) Non-woven fabric and bag is not Plastic and should be considered so and that it should not be covered or categorized in plastic grade under Chapter 39.The applicant has finally submitted for consideration of Non-woven Bag as textile article and for making a specific mention of its definition in the HSN class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... woven bags'. 6.3. In the subject case, the applicant is manufacturing PP Non-woven bags, made from non-woven fabrics of HSN 5603 and is classifying the same as bags made of technical textiles under HS code 63053900 /63059000 and paying GST @ 5% and the raw materials used are PP Granule of HS code 39021000. 7. Adoption of Customs Tariff Interpretative Rules: To avoid classification disputes, Rules of interpretation of the Customs Tariff have been adapted for GST Tariff for classification of goods under GST. As for Rules of interpretation, Customs Tariff classification shall be determined according to the terms of Heading and any relative Section or Chapter Notes. In accordance with the above, as Textile and Textile articles are covered under Section XI of the Customs Tariff, the same is adopted under GST Tariff also for the purpose of specification of rate of GST and the Rules of interpretation. Further, notes 1 (h) under Section XI clearly excludes woven fabrics of plastics and article thereof from the purview of the said section dealing with textile and textile articles. The extract of the same is reproduced hereunder. Note 1(h) of Section XI "woven, knitted or crocheted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of Advance Ruling in the Appeal Case No.06/WBAAAR/Appeal/2018 dated 08.08.2018 wherein PP Leno Bags have been ordered to be classified under Tariff Heading 39232990. 4.6 While passing the order, the authority relied upon Hon'ble Madhya Pradesh High Court Order in the case of Raj Pack Well Ltd Vs Union of India [1993 (41) ECC 285;1993;ECR 351 MP; 1990 (50) ELT 201 MP] regarding classification of woven sacks made of HDPE tapes and fabrics . The relevant portion of the judgment reproduced below. ".............the process of the manufacture of the HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the Department, all clearly go vide its Order dated 25.10,2018 to show the HDPE bags are the bags woven by the plastic strips and they, therefore, are goods of plastic and the materials used for weaving those bags being the strips of plastic made from plastic granules, the strips of plastic used for weaving the aforesaid HDPE woven sacks has to be classified as an item under entry 39.20 of chapter 39 and not under entry 54 06 of chapter 54. Accordingly, the entries of the finished goods have also to be made under the proper chapter of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Authority of Advance Ruling in the Appeal Case No.06/WBAAAR/Appeal/2018 dated 08.08.2018, wherein PP Leno Bags have been ordered to be classified under Tariff Heading 39232990 and also the order of the Hon'ble Madhya Pradesh High Court Order in the case of Raj Pack well Ltd vs Union of India [1993(41) ECC 285;1993;ECR 351 MP; 1990 (50 )ELT 201 MP] regarding classification of woven sacks made of HDPE tapes and fabrics, it is very clear that in the instant case also the PP Non-woven Bags are to be classified under Chapter Heading 39 and not under 6305. 10. Hence, the contention/statement of the applicant that they are manufacturing PP Non-Woven Bags made from Non-woven fabrics of HSN 5603 and classifying the same as bags made of technical textiles under HS code 63053900 and paying GST @ 5% appears to be wrong. RULING In view of the above discussions we pass the following ruling: 1. The item "Polypropylene Non-woven Bags" has to be classified under HSN code 39232990 and not to be classified under HSN code 63059000 and to be taxed at 18% not at 5%. 2. The instant application stands disposed of accordingly. 3. The applicant or the jurisdictional officer, if aggrieved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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