Classification of polymer bags by material leads to Heading 3923 29 90; concessional 5% rate applies only if biodegradability is verified.

Polymer-made biodegradable/compostable shopping bags are classed by material and description and therefore fall under Chapter 39, Heading 3923 29 90. A concessional 5% rate under Entry 319 of Notification No. 9/2025-Central Tax (Rate) applies only where the goods satisfy the notified condition of biodegradability; entitlement is conditional on the product being demonstrably biodegradable. Determination of biodegradability is a technical/environmental question outside the advance-ruling authority's competence and requires authoritative scientific verification before the concessional rate can be confirmed.

---

---

Issues: (i) Classification - whether the applicant's biodegradable/compostable bags are classifiable under Chapter 39 or Chapter 48 and the appropriate HSN; (ii) Applicability of notification and rate - whether supplies of the said bags are covered by entry 319 of Schedule I to Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025 attracting 5% GST w.e.f. 22.09.2025.

Issue (i): Classification of the applicant's biodegradable/compostable bags under the HSN.

Analysis: The goods are made of polymer materials and fall within the scope of plastics and articles thereof under Chapter 39; classification is to be determined by the material and description of the goods rather than by any unverified environmental claim.

Conclusion: The bags are classifiable under Chapter 39, Heading 3923, sub-heading 3923 29 90.

Issue (ii): Whether the concessional entry "Paper Sacks/Bags and bio-degradable bags" in Entry 319 of Schedule I to Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025 applies to the applicant's supplies, attracting 5% GST.

Analysis: Entry 319 provides a concessional rate conditional on the goods being biodegradable. The Authority does not have jurisdiction to make scientific or environmental determinations as to whether a product is biodegradable or compostable; such determinations fall within the remit of specialized environmental authorities. Consequently, applicability of the concessional rate depends on whether the supplied goods are in fact biodegradable as understood for the purposes of the notification.

Conclusion: The concessional rate of 5% under Entry 319 is available only if the bags supplied are biodegradable; this Authority does not adjudicate the scientific question of biodegradability and therefore does not itself confirm entitlement to the concessional rate absent an authoritative determination.

Final Conclusion: The applicant's bags are classified under Heading 3923 29 90; entitlement to the concessional 5% rate under Notification No. 9/2025-Central Tax (Rate), Entry 319, is conditional on the goods being biodegradable and requires appropriate authoritative verification.

Ratio Decidendi: Classification is determined by the material and description of the goods (leading to Heading 3923 29 90 for the applicant's polymer bags), while concessional rates under a notification apply only where the notified condition (biodegradability) is met, and factual or technical verification of that condition is for specialised environmental authorities rather than the Advance Ruling Authority.

---