AAR classifies Sleeping Bag Mk4 under Chapter 9404 30 90 as quilted textile material attracting 12% GST rate

The AAR, Uttar Pradesh classified Sleeping Bag Mk4 large under Chapter Heading 9404 30 90, applying the rule that the most specific description takes precedence over general descriptions. The authority determined that sleeping bags constitute quilted textile materials and attract 12% GST rate under Schedule II, Sr. No. 224 of Notification No. 01/2017-Central Tax (Rate). The product was excluded from Schedule III as it falls under products wholly made of quilted textile materials.

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Issues:
1. Classification of goods for tax purposes under GST Act.
2. Determination of the tax rate applicable to the product "Sleeping Bag Mk4 large."

Analysis:
1. The applicant, a registered assessee under GST, sought an advance ruling regarding the classification of their product, a sleeping bag, under the GST Act. The product specifications included various cotton materials and fell under Chapter HSN 940430, specifically 9404 30, which pertains to products wholly made of quilted textile materials. The applicant contended that the product should be taxed at 12% IGST/6% CGST/6% SGST under this classification.

2. The Authority for Advance Ruling examined the relevant provisions of the CGST Act and UPGST Act and found that the issue raised by the applicant was covered under Section 97(2) of the CGST Act 2017. The applicant sought clarification on the rate of tax applicable to the sleeping bag, emphasizing that it was made of 100% cotton and quilted with cotton yarn. The applicant referenced Notification No. 1/2017-Integrated Tax (Rate) to support their claim for a 12% tax rate on the product.

3. The Authority analyzed the product's composition, the applicable tariff headings, and relevant notifications to determine the correct tax treatment. They referenced specific schedules and rates under the GST Act to conclude that the sleeping bag fell under Chapter Heading 9404 30 90 and should be taxed at 12% (6% CGST and 6% SGST) as a product wholly made of quilted textile materials.

4. In the final ruling, the Authority declared that the product "sleeping bag" would be classified under Chapter Heading 9404 30 90 of the GST Tariff and subject to a 12% GST rate (6% CGST and 6% SGST) as per Notification No. 01/2017-Central Tax (Rate). The ruling was deemed valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh, subject to the provisions of the CGST Act, 2017.

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