Classification of PVC carpet mats under HSN 3918 for GST rate determination

The Appellate Authority for Advance Ruling in Kerala determined that PVC carpet mats are classifiable under HSN 3918 as "Floor coverings of plastics," attracting an 18% GST rate. This decision was based on the manufacturing process and product composition aligning more closely with plastics rather than textile floor coverings. The specific classification and rate apply to the PVC mats manufactured by the applicant, as outlined in the provided details.

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Issues Involved:
1. Classification of PVC carpet mats under the appropriate Tariff Item.
2. Applicable GST rate for PVC carpet mats.

Issue-wise Detailed Analysis:

1. Classification of PVC Carpet Mats:
The primary issue revolves around the classification of PVC carpet mats manufactured by the applicant. The applicant contends that the mats should be classified under Tariff Item 5705.00.49 of the Customs Tariff Act, 1975, which pertains to "Other carpets and other textile floor coverings, whether or not made up," and thus attract a GST rate of 12%. The CGST authority supports this classification. Conversely, the SGST authority argues that the mats fall under HSN 3918, which covers "Floor coverings of plastics," attracting a higher GST rate of 18%.

The manufacturing process involves two stages:
- Stage I: Production of PVC monofilament for non-woven carpet top texture.
- Stage II: Bonding of non-woven carpet top texture with a PVC backing.

The appellant provided detailed descriptions of the materials and processes involved, emphasizing that the exposed surface of the mats consists of textile materials, thus fitting the description under Chapter 57 of the Customs Tariff Act.

However, the judgment notes that the product, despite having a non-woven PVC surface, is excluded from being classified as a textile article under Section XI due to the coating/lamination with plastics. The relevant section and chapter notes, along with HSN explanatory notes, were considered to determine that the product does not qualify as a textile material. Instead, it fits the description under Chapter 39, specifically HSN 3918, which includes combinations of textiles and plastics.

2. Applicable GST Rate for PVC Carpet Mats:
The classification directly impacts the applicable GST rate. If classified under Tariff Item 5705.00.49, the mats would attract a GST rate of 12% as per Entry 146 of Schedule II of Notification No. 1/2017-Integrated Tax (Rate). However, if classified under HSN 3918, the applicable GST rate would be 18% as per Entry No. 104A of Schedule III of Notification No. 43/2017-Integrated Tax (Rate).

The judgment concludes that the PVC carpet mats fall under HSN 3918, thus attracting a GST rate of 18%. This conclusion is based on the interpretation of the manufacturing process and the composition of the product, which aligns more closely with the description of floor coverings of plastics rather than textile floor coverings.

Conclusion:
The Appellate Authority for Advance Ruling in Kerala determined that the PVC carpet mats are classifiable under HSN 3918 as "Floor coverings of plastics." Consequently, the applicable GST rate for these mats is 18% (9% each of CGST and SGST), as per Entry No. 104A of Schedule III of Notification No. 43/2017-Integrated Tax (Rate). This classification and rate apply specifically to the types of PVC floor coverings/carpet/mats manufactured by the applicant as per the submitted manufacturing process and sample.

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