Essential character test classifies partially finished salwar/churidar sets as garments, not fabrics, under the tariff heading.

Three-piece salwar/churidar sets with an unstitched bottom, a semi-stitched, stitched or neck-worked top, and a ready-to-use dupatta were treated as garments rather than mere fabric pieces. Applying Rule 2(a) of the General Rules for Interpretation and the Chapter 62 notes, the Authority found that the sets had the essential character of finished salwar/churidar wear and were identifiable in trade as such. The CBIC clarification on cut fabrics did not change this result because the goods were more than fabric components. The models were classified under CTH 6211, with GST depending on sale value per piece at 5% below Rs. 1,000 and 12% above that threshold.

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Issues: Whether the Model 2, Model 3 and Model 4 salwar/churidar sets, consisting of three pieces with an unstitched bottom and a semi-stitched, stitched or neck-worked top along with a hemmed or knotted dupatta, are classifiable as fabrics under Chapters 50 to 55 or as garments under CTH 6211, and the consequential GST rate applicable.

Analysis: The goods were not mere cut pieces of fabric. The set consisted of three coordinated components intended to form salwar/churidar wear, and the top in the disputed models had already undergone stitching or neck work while the dupatta was in ready-to-use form. The relevant tariff entry specifically covered kurta and salwar with or without dupatta, and the interpretation rules required incomplete or unfinished goods to be treated as complete articles if they had the essential character of the finished article. Applying Rule 2(a) of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975, together with the chapter notes to Chapter 62, the Authority held that these sets had the essential character of salwar/churidar garments and were not classifiable as mere fabrics. The CBIC clarification on cut fabrics and embroidered fabric pieces did not alter this conclusion because the products were more than fabric pieces and had undergone sufficient working to be identifiable as garments.

Conclusion: The disputed Model 2, Model 3 and Model 4 sets are classifiable under CTH 6211 as garments and not as fabrics, and the applicable GST rate depends on the sale value per piece, being 5% where the value is below Rs. 1,000 and 12% where it exceeds Rs. 1,000; the ruling of the lower authority was upheld.

Ratio Decidendi: An incomplete or partially finished textile set is classifiable as a garment under the relevant heading when, on presentation, it has the essential character of the finished article and is identifiable in trade as such, rather than as a mere fabric piece.

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