HSN Code for Grinding Plastic Materials Determined by Polymers' Form

The Authority ruled that the HSN code for grinding of plastic material depends on the primary form of polymers present in the goods, falling under Chapter headings 3901 to 3914. The GST rate applicable to such goods was determined to be 18% as per the relevant notifications.

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Issues Involved: Determination of HSN code and tax rate for grinding of plastic material.

Analysis:

1. Facts of the Case: The applicant, a proprietorship company, sought an advance ruling on the HSN code and tax rate for grinding plastic scrap into small pieces after sorting them color-wise.

2. Interpretation of Law: The Authority considered the provisions of the CGST Act and GGST Act to be the same, unless specifically mentioned otherwise. The key issue was whether the ground plastic material should be classified as primary forms of plastic or remain as scrap.

3. Classification of Product: The Authority referred to Chapter 39 of the Harmonised System of Nomenclature, noting that primary forms of plastic cover irregular shapes like lumps, powders, granules, and flakes. As the ground plastic was in irregular shapes of lumps and flakes, it was deemed to be a primary form of plastic.

4. HSN Code Determination: The Authority then looked at the Custom Tariff Act, 1975, specifically Chapter headings 3901 to 3914, to determine the appropriate HSN code for the ground plastic material. It concluded that the HSN code would depend on the type of primary form of polymers present in the goods.

5. GST Rate Determination: To ascertain the GST rate for the ground plastic material, the Authority referred to Notification No. 01/2017-Ct (Rate) dated 28.06.2017. The applicable GST rate was found to be 18% (9% CGST + 9% SGST) based on the classification under Chapter headings 3901 to 3914.

6. Final Ruling: The Authority ruled that the HSN code for grinding of plastic material depends on the primary form of polymers present in the goods, falling under Chapter headings 3901 to 3914. The GST rate applicable to such goods was determined to be 18% as per the relevant notifications.

In conclusion, the judgment clarified the classification and tax treatment of ground plastic material based on the primary form of polymers, providing a clear ruling on the HSN code and GST rate for such goods.

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