2018 (9) TMI 1770 - AAR - GST

Classification of Polypropylene Leno Bags under Specific Tariff Heading

The ruling classified Polypropylene Leno Bags under Tariff Sub Heading 63053300 if made from woven Polypropylene fabric with specified width and without ... Classification of goods under GST Tariff - Tariff Sub Heading 63053300 (sacks and bags of polyethylene or polypropylene strip) - Section XI textile exclusion - width threshold for strips (Note 1(g)) - Exclusion where fabrics are impregnated, coated, covered or laminated with plastics (Note 1(h)) - Use of Bureau of Indian Standards specifications (IS 16187:2014) in classificationClassification of goods under GST Tariff - Tariff Sub Heading 63053300 (sacks and bags of polyethylene or polypropylene strip) - Section XI textile exclusion - width threshold for strips (Note 1(g)) - Exclusion where fabrics are impregnated, coated, covered or laminated with plastics (Note 1(h)) - Use of Bureau of Indian Standards specifications (IS 16187:2014) in classification - Classification of 'PP Leno Bags' for the purposes of GST Tariff - HELD THAT: - The Authority examined whether PP Leno Bags should be classified under Chapter 39 (plastics and articles thereof) or Chapter 63 (textiles and textile articles). The explanatory notes and Section XI exclusions require that strips or the like of plastics used as textile material must have an apparent width not exceeding 5 mm to fall within Chapter 63 (Note 1(g)), and that woven fabrics impregnated, coated, covered or laminated with plastics are excluded from Chapter 63 (Note 1(h)). The Bureau of Indian Standards specification IS 16187:2014, applicable to PP Leno woven sacks for fruits and vegetables, specifies tape widths in the range of 2.0 to 2.5 mm, which satisfies the width criterion in Note 1(g). On the basis of these tariff clarifications and the IS specification, the Authority concluded that where PP Leno Bags are made from woven polypropylene strips or the like of width not exceeding 5 mm and are not impregnated, coated, covered or laminated with plastics, they qualify as man-made textile materials and are classifiable under Tariff Sub Heading 63053300 rather than the plastics headings.PP Leno Bags made from woven polypropylene strips of width not exceeding 5 mm and without impregnation, coating, covering or lamination with plastics are classifiable under Tariff Sub Heading 63053300.Final Conclusion: The Advance Ruling holds that 'PP Leno Bags', when manufactured from woven polypropylene strips or the like of apparent width 5 mm and without any impregnation, coating, covering or lamination with plastics, are to be classified under Tariff Sub Heading 63053300; the Ruling is subject to the provisions of the GST Act. Issues: Classification of Polypropylene Leno Bags under the CGST/WBGST ActsIssue 1: Admissibility of Advance RulingThe Applicant sought a ruling on the classification of Polypropylene Leno Bags under the CGST/WBGST Acts, claiming that the question raised had not been decided by any authority under the GST Act. The Application was admitted as the officer concerned raised no objection to its admission.Issue 2: Composition and Manufacturing ProcessThe Applicant manufactures Polypropylene Leno Bags primarily used for packing various goods. The bags are composed of Polypropylene, Linear Low Density Polyethylene, and Colour Master Batch. The manufacturing process involves extrusion, weaving, and stitching to form the bags.Issue 3: Supporting DocumentsThe Applicant submitted test reports from various institutes and a communication regarding a capital subsidy under the Technology Upgradation Fund Scheme. However, certain reports were deemed inadmissible due to restrictions on reproduction and use for litigation.Issue 4: Classification CriteriaThe absence of a specific Tariff Code for PP Leno Bags led to an analysis of relevant Tariff Sub Headings. The classification depended on whether the bags met specific criteria regarding composition, weaving width, and absence of impregnation or coating with plastics.Issue 5: Interpretation of Tariff HeadingsThe ruling considered the distinctions between plastic articles and textile products under the GST Tariff. Explanatory notes and clarifications were crucial in determining the appropriate classification for PP Leno Bags.Issue 6: Compliance with SpecificationsThe classification hinged on whether the PP Leno Bags met the width and composition specifications outlined in relevant Indian Standards. The bags had to align with specific requirements to be classified accurately.Judgment:The ruling determined that PP Leno Bags, made from woven Polypropylene fabric with specified width and without plastic impregnation, coating, or lamination, should be classified under Tariff Sub Heading 63053300. The decision was subject to the provisions of the GST Act until declared void.This detailed analysis of the judgment highlights the intricate considerations involved in classifying Polypropylene Leno Bags under the CGST/WBGST Acts, emphasizing the importance of composition, manufacturing process, supporting documents, and compliance with classification criteria and specifications.