TaxTMI 
TaxTMI 
2019 (5) TMI 1037
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....referred as 'Applicant) is registered under the GST Act 2017 vide GSTIN: 33AMRPK5234D1Z6 . The Applicant is engaged in the trading business of Polypropylene Mats which are plaited using Polypropylene Straw on wholesale and retail basis. The Applicant has sought Advance Ruling on the following questions: "1. Whether HSN Code for Polypropylene Mat which are plaited using Polypropylene Straw falls under Chapter Heading 4601 or 3902 ? 2. What is the applicable tax rate for the Polypropylene Mats ?" The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted copy of Challan evidencing payment of application fees of Rs. 5000/- each under Sub-rule (1) of Rule 104 of CGST Rules 2017 and also SGST Rules 2017. 2. The Applicant is engaged in the business of trading of Polypropylene Mats on wholesale and retail basis. They are buying from various manufacturers and selling the Polypropylene Mat. The HSN code for the mats given by the manufacturer is 460101. They are invoicing the outward supply mentioning the description as "Polypropylene Mats / Mattings" under the HSN Code 460101. 2.1 The Applicant has stated that the HSN Code for the Polypropylene M....
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.... per Drawback Schedule, HSN, WCO explanatory notes and also case laws submitted. They gave a written submission of the same and agreed to submit manufacturing process with raw materials used, photos of samples and sales invoices. They submitted copies of purchase invoice, where it is called 'Polypropylene Mat' and also commonly called 'Satranji'. In the written submission, they had stated that * They are doing polypropylene Mat business; the HSN Code for the mats as given by the Manufacturer is 460101 * Chapter Notes to Chapter 46 of the HS Nomenclature 2017 Edition of the World Customs Organisation exactly describes the Polypropylene Mat which is also called as Satranj or Polypropylene Straw Mat. * Circular in F.N0. 93/24/87-CX3 dated 16.06.1987 issued by the Ministry of Finance clarified the HSN Code for Polypropylene Mat is 4601 * The Judgment of the Customs, Excise and Service Tax Tribunal in the case of Supreme Industries Ltd. Vs. Commissioner of Central Excise on 27th May 2004 = 2004 (5) TMI 378 - CESTAT, NEW DELHI decided that the correct HSN Code is 4601 for Polypropylene mats * As per Circular No. 4/2018-Customs, F.No. 609/ 12/2018-DBK dated 24.01.2018, issu....
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.... to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall be applied for the interpretation and classification of goods. 5.1 The relevant Chapter Notes of Chapter 39 of the Customs Tariff and the entries related to the CTH 3902 are examined as under: The Chapter Notes (relevant) are as follows: Notes. 1. Throughout this Schedule, the expression "plastics" means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Throughout this Schedule any reference to "plastics" also includes vulcanised fibre. The expression, however, does not apply to materials regarded as textile materials of Section XI. 2. This Chapter does not cover: (a) lubricating preparations of heading 2710 or 3403; (b) waxes of heading 2712 or 3404; (c) separate chemically defined organic comp....
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....composition leather or of felt or non-wovens, human hair, horsehair, textile rovings or yarns, or monofilament and strip and the like of Chapter 54. 3. For the purposes of heading 4601, the expression "plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands" means plaiting materials, plaits and similar products of plaiting materials, placed side by side and bound together, in the form of sheets, whether or not the binding materials are of spun textile materials. General notes to Explanatory Notes to Chapter 46 of HSN states that, GENERAL In addition to articles of loofah, this Chapter covers semi-manufactured products (heading 46.01) and certain articles (headings 46.01 and 46.02) made by interlacing, weaving or by similar methods of assembling unspun materials, particularly ; (1) Straw, osier or willow, bamboos, rushes, rattans, reeds, chipwood (i.e., wood in thin strips), drawn wood, strips of other vegetable material (for example, strips of bark, narrow leaves and raffia or other strips obtained from broad leaves such as those of banana plants or palm trees), provided they are in a state or form suitable for plaiting, int....
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....as defined in the General Explanatory Note to the Chapter or from the plaits or similar products of plaiting materials described in Part (A) above. Those obtained directly from plaiting materials are either formed of strands woven together, generally in the manner of warp and weft fabrics, or made of parallel strands placed side by side and maintained in position in the form of sheets by transverse binding threads or strands holding the successive parallel strands. The woven goods may consist wholly of plaiting materials, or may consist of a warp of plaiting material and a wefi of textile yam, or vice versa, provided that the sole function of the textile yam (apart from incidentally introducing colour effects) is to bind the plaiting substances. Similarly, in the case of the goods made by binding parallel strands of plaiting materials, the hinder may be a plaiting material, a textile yam or some other material. Similar processes of binding together or weaving are also used to obtain goods in sheet form from the plaits or similar products of plaiting materials described in Part (A) above. The goods of this group, which may be reinforced or backed or lined with woven textil....
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....lastic mat/ matting (Satranji) should be classifiable as an article of plastic under Chapter 39, or as a manufacture of 'plaiting materials' under Chapter 46 of the C.E.T. 2. The matter has been examined in the Ministry. It is reported that, for the purpose of manufacture of plastic mat/ matting (Satranji), poly propylene falling under sub-heading No. 3902.10 is first converted into tube form by application of heat and air on an extruder machine, the length of this tube of diameter 1.5 mm. is cut according to the size of the mat to be manufactured. These cut tubes are further used on weaving loom machines to produce Satranji with the help of polyester or cotton yarn as weft material. 3. Articles of plastics remained classified under Heading No. 39.22 of the CET during the period prior to 10-2-1987 (starting from 28-2-1986). From 18-2-1987, articles of plastics stand classified under five different headings i.e. Heading Nos. 39.22, 39.23, 39.24, 39.25 and 39.26 of CET. A perusal of the tariff description of all the above-mentioned headings does not indicate that such headings cover even the woven plastic materials like plastic mat/ mating (Satranji). The relevant Section and C....
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.... in alignment with the HSN. Further, in the case at hand the process of manufacture of the Propylene Mat is similar to that considered in the Circular. Therefore we hold that the 'Polypropylene Mats' supplied by the applicant is classifiable under CTH 46019900. 5.5 It is pertinent to note that the classification of the 'Propylene Mats' under CTH 4601 is in line with the classification in the Drawback Schedule in respect of 'Polypropylene Mats'. 6. On the applicable rate of tax, the product in hand is classified under CTH 4601. Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and Notification No. II(2)/CTR/532/(d-4)/2017 vide G.o. (Ms) No. 62 dated 29.06.2017 under Schedule Il covers CTH 4601 which is reproduced as follows: Schedule-Il -6% S.No. Chapter Heading/ Sub-heading / Tariff item Description of goods 103. 4601 Plaits and similar products of plaiting materials, whether or not assembled into strips; plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands or woven, in sheet form, whether or not being finished articles (for example, mats matting, screens) of vegetables materials such as of Bamboo, of rattan, of Ot....