2022 (12) TMI 255 - AAR - GST

Satin and Taffeta Rolls classified under HSN 5807 with 12% GST instead of HSN 5806 with 5% GST

AAR Karnataka classified Satin Rolls and Taffeta Rolls (19mm-40mm width) under HSN 5807, attracting 12% GST rate, rejecting applicant's claim for HSN 5806 ... Classification of goods - narrow woven fabrics - labels of textile materials in strips or cut to shape or size - application of Chapter and Section Notes for tariff classification - interpretation of HSN sub-heading 5807 10 20 - advance ruling on classificationClassification of goods - narrow woven fabrics - labels of textile materials in strips or cut to shape or size - interpretation of HSN sub-heading 5807 10 20 - Classification of Satin Rolls and Taffeta Rolls of widths between 19 mm and 40 mm. - HELD THAT: - The Authority examined the product description, samples and supplier invoices and applied the Section and Chapter Notes and the WCO Explanatory Notes. Chapter Note 5 to Chapter 58 defines 'narrow woven fabrics' as woven fabrics of width not exceeding 30 cm (which includes fabrics cut from wider pieces provided with selvedges). The impugned products are woven textile strips within the stated width range, have selvedges, and are made of man-made fibres (polyester/nylon) with surface coatings to improve printability or prevent fraying. They are not assembled by adhesive and are not embroidered. Heading 5806 is inapplicable because that heading covers narrow woven fabrics assembled by adhesive (bolducs) or otherwise excluded goods; the products consist of warp and weft and are not so assembled. Heading 5807 covers labels, badges and similar articles of textile materials in the piece, in strips or cut to shape or size, not embroidered, and includes woven labels of man-made fibres under sub-heading 5807 10 20. Applying these classificatory principles, the Satin Rolls and Taffeta Rolls qualify as narrow woven textile strips used as labels and therefore fall within tariff sub-heading 5807 10 20. [Paras 15, 16, 17, 18, 19]Satin Rolls and Taffeta Rolls (19 mm to 40 mm) are classifiable under tariff heading 5807 10 20.Final Conclusion: The Advance Ruling determines that the unprinted Satin Rolls and Taffeta Rolls of widths between 19 mm and 40 mm are classifiable as woven labels of man-made fibres under tariff heading 5807 10 20. Issues:Classification of products 'Satin Rolls' and 'Taffeta Rolls' with sizes between 19mm to 40mm under the CGST and KGST Acts.Analysis:1. Admissibility of the Application: The issue falls under 'classification of any goods or services or both' and is admissible under Section 97(2)(a) of the CGST Act. 2. Brief Facts: The applicant, a proprietary concern dealing in label rolls for garment wash care labels, sought advance ruling regarding the classification of 'Satin Rolls' and 'Taffeta Rolls' under different GST rates based on vendors' classification.3. Interpretation of Law: The applicant did not provide a specific interpretation of the law related to the classification question.4. Comments by Legal Cell: The Legal Cell noted that the products are not assembled with adhesive, indicating they do not fall under tariff heading 5806. Based on technical specifications, the products are classified under tariff heading 5807, attracting 12% GST.5. Personal Hearing: The applicant's representative reiterated the products' details and argued for classification under HSN 5807 during the personal hearing.6. Findings & Discussion: The ruling authority considered the submissions, applicant's products, and additional information provided. The products were described in detail, including the manufacturing process and materials used.7. Classification Examination: The authority examined the Customs Tariff Act and WCO Explanatory Notes to determine the classification. The products qualified as 'Narrow Woven Fabrics' under Chapter 5806.8. Tariff Headings Analysis: The authority concluded that the products did not fall under tariff heading 5806 but were appropriately classified under tariff heading 5807 10 20 for woven fabrics made of manmade fibers.9. Ruling: The final ruling classified the products 'Satin Rolls' and 'Taffeta Rolls' with sizes between 19mm to 40mm under tariff heading 5807 10 20, attracting 12% GST.This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the authority's decision regarding the classification of the products under the CGST and KGST Acts.