Classification and GST Rate Determination for Laminated HDPE Geomembrane under HSN Code

The product "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for Water Proof Lining Type-II, IS:15351:2015" was classified under HSN Code 5911 10 00 as "Textile Fabrics Coated, Covered or Laminated with Plastics, of a Kind Used for Technical Purposes" with a GST rate of 12% (CGST @ 6% + UGST @ 6%). The Authority for Advance Ruling determined that the product falls under this classification and attracts the specified GST rate.

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Issues Involved:
1. Classification of "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for Water Proof Lining Type-II, IS:15351:2015" under HSN Code 5911 10 00 or HSN Code 3926 90 99.
2. Determination of the correct GST rate applicable to the product.

Issue-Wise Detailed Analysis:

1. Classification of the Product:

Applicant's Submission:
The applicant, M/s. Emmbi Industries Ltd., contended that their product, "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for Water Proof Lining Type-II, IS:15351:2015," should be classified under HSN Code 5911 10 00 as "Textile Fabrics Coated, Covered or Laminated with Plastics, of a Kind Used for Technical Purposes" with IGST @ 12% [CGST @ 6% + UGST @ 6%]. They argued that the product is known in the market as agro textiles and is used for water-proof lining in ponds, canals, and other water bodies, primarily for agricultural purposes.

Manufacturing Process:
The manufacturing process involves several stages:
- Tape/Strip Extrusion: HDPE granules are extruded, slitted, and stretched to produce tapes/strips of width 2.1 mm to 3.7 mm.
- Fabric Weaving: The tapes/strips are woven into HDPE woven fabrics on circular looms.
- Liner Film Extrusion: Polyethylene granules are extruded to produce a film.
- Lamination Coating: The HDPE woven fabric is laminated on both sides with LDPE.
- Sealing: The laminated fabrics are joined/sealed together by a heat air blower sealing process.

Classification Flow:
- HDPE Tapes/Strips: Classified under HSN 5404 90 20.
- Woven Fabrics: Classified under HSN 5407 20.
- Laminated Coated Fabrics: Classified under HSN 5911 10 00.

Applicant's Justification:
The applicant referred to various notifications and publications to substantiate their claim:
- Notification No. 54/2015-2020: Issued by the Directorate General of Foreign Trade, recognizing the product as Technical Textiles.
- Publication by Ministry of Textiles: Recognizing "Geomembranes" as part of the Technical Textile Segment.

Authority's Discussion:
The Authority examined the manufacturing process and the classification flow provided by the applicant. They noted that the product is made from HDPE tapes/strips of less than 5 mm, which are woven into fabrics and then laminated. The product is used for technical purposes, specifically for water-proof lining.

HSN Code 3926:
The Authority considered HSN Code 3926 90 99, which refers to "Other Articles of Plastics." However, they noted that Chapter Note 1 to Chapter 39 excludes textile materials of Section XI from the scope of plastics.

Conclusion:
The Authority concluded that the product "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for Water Proof Lining Type-II, IS:15351:2015" is correctly classifiable under HSN Code 5911 10 00 as "Textile Fabrics Coated, Covered or Laminated with Plastics, of a Kind Used for Technical Purposes."

2. Determination of the Correct GST Rate:

The classification under HSN Code 5911 10 00 implies that the product attracts IGST @ 12% [CGST @ 6% + UGST @ 6%].

Advance Ruling:
The Authority for Advance Ruling pronounced that the "Technical Laminated Fabrics woven out of strips below 5 mm fit for use as Pond liner are 'Laminated Textiles Products' and are covered under HSN Code 5911."

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