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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether raincoats made of PVC sheets are classifiable under Chapter 62 as raincoats of man-made fibres or other textile materials, or under Chapter 39 as articles of plastics; and the corresponding GST rate applicable on such supply.
Analysis: The Authority examined the manufacture of PVC raincoats and held that the process of making PVC sheets does not produce any fibre or filament. On that basis, PVC sheets were not accepted as man-made fibres or other textile materials, and the goods were found not to fall within Section XI or Chapter 62 of the Customs Tariff. The Authority then relied on the wording of Chapter 39 and the HSN Explanatory Notes to conclude that articles of apparel and clothing accessories made by sewing or sealing plastic sheets, including raincoats, are covered under heading 3926. The Authority also treated the goods as apparel for tariff purposes and held that the specific guidance in the HSN notes governed classification.
Conclusion: PVC raincoats are classifiable under HSN 392620 and attract GST under Entry No. 111 of Schedule III to Notification No. 1/2017-Central Tax (Rate), at 9% CGST and 9% SGST.
Ratio Decidendi: Where a raincoat is manufactured from PVC sheets without the formation of textile fibres or filaments, it is classifiable as an article of plastics under heading 3926, and the HSN Explanatory Notes covering apparel made by sewing or sealing plastic sheets control the tariff classification over Chapter 62.
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