Plastic grinding classification: processed plastic scrap becomes primary form plastic and attracts GST at the applicable rate.

Plastic grinding obtained from processed plastic scrap loses its character as scrap once it is sorted and ground into small pieces. Under Note 6 of Chapter 39 of the Customs Tariff Act, 1975, such material falls within the primary forms of plastics, including flakes and similar bulk forms, and is classifiable under the relevant heading in 3901 to 3914 according to the polymer involved. The applicable GST rate follows the entry for plastics in primary forms under Notification No. 01/2017-CT (Rate), resulting in tax at 18%.

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Issues: Whether plastic grinding obtained from processed plastic scrap is classifiable as plastic scrap or as plastics in primary forms under Chapter 39, and what GST rate applies to such goods.

Analysis: The processed plastic scrap loses its identity as scrap after being sorted and ground into small pieces. Under Note 6 of Chapter 39 of the Customs Tariff Act, 1975, primary forms of plastics include blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms. Plastic grinding in small pieces falls within these primary forms and is therefore classifiable under headings 3901 to 3914, depending on the nature of the polymer. The applicable rate follows the entry for goods in primary forms under Notification No. 01/2017-CT (Rate) dated 28.06.2017.

Conclusion: Plastic grinding in small pieces is not plastic scrap and is classifiable under the relevant heading within 3901 to 3914 as primary form plastic, attracting GST at 18%.

Ratio Decidendi: Goods obtained by processing plastic scrap into small pieces cease to be scrap and, if they fall within the enumerated primary forms of plastics, are to be classified according to the relevant heading for plastics in primary form with tax determined by the corresponding tariff entry.

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