Reclassification of Polypropylene Bags: 5% Tax Upheld

The WBAAR classified Polypropylene Non-woven Bags under HSN 6305 33 00, taxable at 5%, contrary to the initial classification as plastic goods at 18%. The decision was based on the bags being made from processed non-woven fabric and not involving traditional plastic molding. The Appeal was disposed of with directions to notify both parties of the revised ruling.

---

---

Issues: Classification and Rate of Tax for Polypropylene Non-woven Bags under GST Act

Issue 1: Classification of Polypropylene Non-woven Bags
The Appellant, a manufacturer of Polypropylene Non-woven Bags, sought a ruling on the classification and tax rate applicable to their goods under the GST Act. The WBAAR classified the bags as plastic goods under Sub Heading 3923 29, taxed at 18%. The Appellant contended that the bags should be classified under heading 6305 39 00 as made-up textile articles, not plastic goods.

Issue 2: Interpretation of Customs Tariff
The Appellant argued that the non-woven bags should be considered as textile articles based on Section Note 7 of Section XI of the Customs Tariff, as the bags are made from processed non-woven fabric. They cited relevant case law to support their interpretation of the classification.

Issue 3: Nature of Polypropylene Non-woven Fabrics
The Appellant asserted that polypropylene non-woven fabrics are textile materials, not plastics, relying on the definition of "textile" provided by the Hon'ble Apex Court. They argued that the process of forming the fabric did not involve molding like traditional plastics, thus should not be classified under Chapter 39 of the Customs Tariff.

Issue 4: Common Parlance Interpretation
The Appellant contended that the bags should be considered as "cloth bags" based on common parlance usage, supported by various court cases. They emphasized the importance of interpreting expressions in their popular or common sense.

Issue 5: Comparison with Previous Rulings
The Appellant highlighted rulings from other Advance Ruling authorities classifying similar bags under heading 6305 and subject to GST. They argued against the reliance on a previous ruling by the WBAAR concerning polypropylene leno bags, stating that the bags should be classified as textile products under heading 5603.

Conclusion
The WBAAR, after considering the submissions and examining the manufacturing process of the bags, concluded that the Polypropylene Non-woven Bags fall under HSN 6305 33 00 and are taxable at 5% for bags not exceeding a certain value. The WBAAR modified the original ruling based on the misinterpretation of the primary raw materials used in manufacturing the bags. The Appeal was disposed of accordingly, with directions to inform both parties of the decision.

---