Classification of Poly Propylene Leno Bags under HS Code 3923 as "Sacks and bags" with 18% GST rate.

The ruling authority determined that Poly Propylene Leno Bags are correctly classified under HS Code 3923 as "Sacks and bags" of plastics. The applicable GST rate for the supply of these bags was set at 18% (CGST @ 9% and SGST @ 9%). The ruling was made based on the analysis of the Customs Tariff and the GST Tariff, supported by previous rulings and duty drawback rates.

---

---

Issues:
Identification of correct classification of Poly Propylene Leno Bags among heading no. 63063300 and 39232990.
Identification of rate of duty applicable as per respective HSN of Poly Propylene Leno Bags.

Analysis:

Issue 1: Identification of correct classification of Poly Propylene Leno Bags

The applicant sought an advance ruling on the classification of Poly Propylene Leno Bags under heading no. 63063300 and 39232990. The ruling authority admitted the application under Section 97(2)(a) & (e) of the CGST/SGST Act, 2017. Despite the absence of the applicant during a scheduled hearing, the ruling proceeded based on the assumption that the subject sample provided was indeed Poly Propylene Leno Bags. The Customs Tariff was consulted, revealing that Poly Propylene Leno Bags fall under HS Code 3923, specifically under the category of "Sacks and bags" of plastics. It was concluded that the subject goods were correctly classified under HS Code 3923 of the Customs Tariff.

Issue 2: Identification of rate of duty applicable

To determine the rate of GST levied on the supply of Poly Propylene Leno Bags, the ruling authority referred to the corresponding HS Code 3923 of the GST Tariff. The relevant chapter note indicated a tax rate of 18% on the supply of such goods. Relying on a previous advance ruling by the Odisha Authority and the West Bengal Appellate Authority, it was established that Polypropylene Leno Bags are classified under GST Tariff Heading '39232990'. Additionally, the CBEC Revised Duty Drawback rates schedule from 01.10.2017 also supported the classification of woven bags of polypropylene under Chapter 39 without ambiguity. Consequently, the ruling determined that the supply of Poly Propylene Leno Bags would be subject to GST at 18% (CGST @ 9% and SGST @ 9%).

In conclusion, the ruling clarified the correct classification of Poly Propylene Leno Bags under HS Code 3923 and established the applicable GST rate of 18% for the supply of such goods.

---