TaxTMI 
TaxTMI 
2019 (3) TMI 832
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....y the same. 2. The applicant submitted that they are uncertain as to the classification of the following goods under the GST regime as a result of overlapping entries in the GST Schedules as notified by Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 and Notification No. 1/2017 - State Tax (Rate) dated 30.06.2017 (hereinafter collectively referred to as the "Rate Notifications"): a. Wet Baby Wipes b. Wet Face Wipes c. Bed and Bath Towels d. Shampoo Towels 3.1 The applicant submitted that the overlapping HSN entries along with the description as given in the Rate Notifications pertaining to the Applicant's product, "Wet Baby Wipes" are as under : HSN Code Description of Goods as per Rate Notifications 3307 Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorisers, whether or not perfumed or having disinfectant properties; such as Pre-shave, shaving or after-shave Preparations, Shaving cream, Personal deodorants and antiperspirants 3401 30 Organic surface-active products and....
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.... referred to the relevant Notes under the First Schedule of the Customs Tariff Act, 1975 in order to obtain clarity as to the taxation of "Wet Baby Wipes" under GST. 3.4 In light of the above, it is submitted that upon perusal of the First Schedule of the Customs Tariff Act, 1975 even Chapter sub-heading 3401 1990 appears relevant to the Applicant's wet wipes. In this regard, the Chapter sub-heading 3401 1990 of the First Schedule of the Customs Tariff Act, 1975 is reproduced hereunder: HSN Code Description under First Schedule of the Customs Tariff Act, 1975 3401 Soap; organic surface-active products and preparations for use as soap, in the form of bars, cakes, moulded pieces or shapes, whether or not containing soap; organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent 3401 19 90 Other 3.5 It is submitted that even other suppliers are supplying baby wipes under numerous HSN Codes and GST Rates. The applicant has submitted sample copies of GST invoices of other ....
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....bove Chapter sub-headings. As the Wet Face Wipes can qualify as non-wovens, cleansing tissues and even cosmetic preparations, the Applicant has requested for correct classification. 4.3 In view of the above, the applicant requested to determine the HSN Code as well as GST Rate for the Applicant's Wet Face Wipes. 5. With regard to Bed and Bath Towels, the Applicant reiterated the submissions made with regard to Wet Face Wipes and requested to provide clarity as to the classification and GST Rate for Bed and Bath Towels. 6.1 With regard to Shampoo Towels, the Applicant reiterated the submissions with regard to Wet Face Wipes. Apart from the entries already listed hereinabove, the Applicant also drew attention to the following entry: HSN Code Description of Goods as per Rate Notifications 3305 All goods, i.e. preparations for use on the hair such as Shampoos; Preparations for permanent waving or straightening; Hair lacquers; Brilliantines (spirituous); Hair cream, Hair dyes (natural, herbal or synthetic) [other than Hair oil] 6.2 The applicant submitted that given the ambiguity, classification and GST Rate for Shampoo Towels may be clarified. 7.1 The applica....
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....ears to be classifiable under HSN Code 340130 (d) Shampoo Towels are non woven fabrics (30 cm X 24 cm size) immersed with solution and used for cleansing hair, which are classifiable under HSN Code 3307. It appears to be cosmetic material. 9.2 It is further informed by the Vadodara - II Commissionerate that HSN Code 4818, 5603 and 9619 covers the dry material, hence above products are not classifiable in these HSN Codes. 10. We have considered the submissions made by the applicant in its application, further submissions and at the time of personal hearing. We have also considered the views of the Central Goods & Services Tax and Customs Commissionerate, Vadodara-II. 11. We find that the main issue involved in this case is regarding classification of the products (a) Wet Baby Wipes, (b) Wet Face Wipes, (c) Bed and Bath Towels, and (d) Shampoo Towels. 12.1 It is observed that the Explanation (iii) and (iv) of the Notification No. 1/2017Central Tax (Rate) dated 28.06.2017 provides as follows :- "Explanation. - For the purposes of this notification, - (i) ...... (ii) ...... (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a t....
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....e Glycol Humectant Polysorbate 20 Surfactant and Fragrance Solubiliser PGE-40 Hydrogenated Castor Oil Emulsifying Agent Disodium Cocoamphodiacetate Cleansing Agent Herb Complex - 6 Biological Additive used for moisturizing, nourishing and natural antibacterial activity Disodium EDTA Chelating Agent Aloe Barbadensis Leaf Juice (Aloe Vera) Purgative Aloin (nourishing and soothing agent) Vitamin E Vitamin Fragrance Fragrance 13.2 The applicant has submitted the composition, size and use of 'Wet Face Wipes' as follows :- • Fabric: Non-woven spun lace fabrics of 40-60 grams per square meter made from 60-70% viscose (regenerated cellulose) fiber + 30%-40% polyester fiber • Size of each wipe: 150 mm x 200 mm • Use [As per declaration on the package]: The wipes are formulated with Aloe Vera, Vitamin E, etc. and will be used to remove dirt and grime from the face. • Ingredients and Function: Ingredients Function Water Water Di-propylene Glycol Chelating Agent Glycerin Moisturisation Propylene Glycol Humectant Aloe Barbadensis Leaf Juice (Aloe Vera)....
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....ated cellulose) fiber + 30%-40% polyester fiber, the size of each wipe being 150 mm X 200 mm. The Licence issued under Drugs and Cosmetics Act, 1940 for the said product, a copy of which is submitted by the applicant indicates that 'approx. quantity of lotion in one wipe is NLT 3.2 g.'. The list of ingredients used in 'Wet Baby Wipes' and functions of such ingredients mentioned in the copy of said licence and the list of ingredients and their functions submitted by the applicant indicates that these ingredients act as humectant, preservative, moisturisation, surfactant and fragrance solubiliser, emulsifying agent, cleansing agent, biological additive used for moisturizing, nourishing and natural antibacterial activity, chelating agent, purgative aloin (nourishing and soothing agent), vitamin and fragrance. It is also mentioned in the said licence that 'the above formula will be impregnated on clover fabric wipes'. 14.2 The product 'Wet Face Wipes' is manufactured with the use of non-woven spun lace fabrics of 40-60 grams per square meter made from 60-70% viscose (regenerated cellulose) fiber + 30%-40% polyester fiber, the size of each wipe being 150 mm X 200 mm. The Licence issu....
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....N reads as follows :- "The expression "perfumery, cosmetic or toilet preparations" in heading 3307 applies inter alia, to the following products : scented sachets; odoriferous preparations which operate by burning; perfumed papers and papers impregnated or coated with cosmetics; contact lens or artificial eye solution; wading, felt and nonwovens, impregnated, coated or covered with perfume or cosmetics; animal toilet preparations. 16.2 Further, Explanatory Notes of Harmonized System of Nomenclature provides in respect of Chapter 33 that this Chapter does not cover, inter-alia, Soaps and paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent (heading 34.01). 16.3 Chapter Heading 3401 covers "Soaps; Organic surface-active products and preparations for use as soap, in the form of bars, cakes, moulded pieces or shapes, whether or not containing soap; organic surface - active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent. 16.4 Further, in case of Chapter 56, as....
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....the applicant therein (a different manufacturer, not the applicant herein) are classifiable under Heading 5603. While arriving at the said conclusion, it has been inter-alia observed in the said Ruling that the wipes manufactured by the applicant therein using spunlace non-woven fabric, which are merely sprinkled with water and some chemicals for aiding the process of cleaning/wiping are classifiable under Chapter Heading 5603; that the exclusion in Chapter Note 1(a) to Chapter 56 applies only in a case where the textile material is present merely as a carrying medium; that in that case, the wipes made of spunlace nonwoven fabrics perform the primary function of cleaning / wiping by absorbing dust, grime dirt, oil etc. and could not by any stretch of imagination be called 'merely' a carrying medium. It was further observed that the wipes in question, which are used for the purpose of cleaning/wiping cannot by any stretch of imagination be called perfume, cosmetic or toilet preparations, and that is why the same cannot be classified under Chapter Heading 3307. 17.2 The said Ruling has been given on the basis of the facts of particular case presented before that authority. However....
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....ideration while deciding the classification, it is clear that the essential character of the wipes in the instant case is imparted by the components which are to be mixed with the textile material. 8.4 As per the explanatory notes to the HSN, the HS code 5603 clearly excludes nonwoven, impregnated, coated or covered with substances or preparations such as perfumes or cosmetics, soaps or detergents, polishes, creams or similar preparations. The HSN is reproduced as follows : "The heading also excludes: Nonwoven, impregnated, coated or covered with substances or preparations [i.e. perfumes or cosmetics (Chapter 33), soaps or detergents (heading 3401), polishes, creams, or similar preparations (heading 3405), fabric, softeners (heading 3809)] where the textile material is present merely as a carrying medium. Further, HS code 3307 covers wadding, felt and non-woven, impregnated, coated or covered with perfumes or cosmetics. The HS code 3401, would cover paper, wadding, felt and non-woven impregnated, coated or covered with soap or detergent whether or not perfumed". 8.5 Further, as per the explanatory notes to the HSN, the heading 3307 includes wadding, felt and nonwoven....