2018 (10) TMI 1051 - AAR - GST

Classification & Tax Rate for Nonwoven Rice Bags: HSN 63053300, 2.5% CGST, 2.5% SGST

The authority ruled that the Non-woven fabric bags, known as Rice Bags, fall under HSN 63053300, and the applicable tax rate for bags valued not exceeding ... Classification of goods - rate of tax - Nonwoven Rice Bags - Held that:- The applicant purchases non-woven fabric roll, convert into sheets by cutting and on printing, stitch into bags which are used mainly for packing rice and food products. They have further stated that their product non woven fabric bags of various sizes falls below ₹ 1000 each. Heading 6305 covers textile sacks and bags of a kind normally used for the packing of goods for transport, storage or sale - The applicant manufactures non-woven fabric bags which is used mainly for packing rice and food products and the product made of 100% polypropylene fiber is classifiable under 63053300. Rate of tax - Held that:- The applicant has stated that their product nonwoven fabric bag falls below ₹ 1000/ Therefore, the applicable rate is 2.5% CGST as per S.No. 224 of Schedule I of Notification No. 1/2017-C.T. (Rate) dated 28.06.2017 and 2.5% SGST as per S.No. 224 of Schedule I of G.O. (Ms) No. 62 dated 29.06.2017 No. II(2)/CTR/532(d-4)/2017. Ruling:- The Non-woven fabric bags called as Rice Bags manufactured by the applicant falls under HSN 63053300. The applicable rate for the bags of value not exceeding ₹ 1000 per piece is 2.5% CGST as per S.No. 224 of Schedule I of Notification No. 1/2017-C.T. (Rate) dated 28.06.2017 and 2.5% SGST as per S.No. 224 of Schedule 1 of G.O. (Ms) No. 62 dated 29.06.2017 No. II(2)/CTR/532(d-4)/2017. Issues:Clarification on Rate of tax and HSN code for Nonwoven Rice Bags.Analysis:The applicant, a registered person under the GST Act, sought an Advance Ruling regarding the rate of tax and HSN code for Nonwoven Rice Bags. The applicant purchases nonwoven fabric rolls, converts them into bags used for packing rice and food products. The GST council meeting had indicated that these bags fall under HSN Code 6305, to be taxed at 5% if the sale value is below Rs. 1000 and at 12% if above, although the GST Act schedule did not mention this. The GST department clarified that Nonwoven Bags fall under HSN Code '63059000' and are taxed at 5% if the sale value does not exceed Rs. 1000. The applicant provided detailed information about their manufacturing process, products, and sales, emphasizing that their bags are sold below Rs. 1000 each.Upon examination, it was found that the applicant's bags are made from non-woven fabric rolls of polypropylene fiber, classified under HSN 5603, and sold as Packing Bags below Rs. 1000 each. The bags are created by cutting, printing, and stitching the fabric based on client requirements. The issue before the authority was to determine the appropriate Rate of Tax and HSN code for these Nonwoven Rice Bags. The bags were classified under HSN 63053300, as they are used for packing rice and food products, falling under the description of goods in Schedule 1 of Notification No. 1/2017-C.T. (Rate) dated 28.06.2017, taxable at 2.5% CGST and 2.5% SGST.The authority ruled that the Non-woven fabric bags, known as Rice Bags, manufactured by the applicant, fall under HSN 63053300, and the applicable tax rate for bags valued not exceeding Rs. 1000 per piece is 2.5% CGST and 2.5% SGST, as per the relevant schedules and notifications. The ruling clarified the classification and tax treatment for the applicant's products, providing a clear decision on the Rate of Tax and HSN code for Nonwoven Rice Bags.