AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 752
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....opinion the same was referred to the appellate authority for advance ruling U/s 98(5) of the GST Ac. Section 98(5) of CGTST/SGST Act specifies that where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question. The opinion of both the authorities were as follows 3.1 The CGST authority is of the view that the PVC carpet mats are classifiable under Customs Tariff Heading 5705.00.49 and is liable to GST @ 12% as per Sl. No. 146 of the Schedule II of the Notification No. 1/2017. 3.2 The SGST authority is of the view that the Floor covering of plastics are covered under HSN 3918 of Customs Tariff Act, 1975. Therefore PVC carpet Mats would fall in the Entry No. 104A of Schedule-III thereby attracting tax at the rate of 18% (28% Upto 14.11.2017 and 18% thereafter as per Sl. N o. 104A of Schedule-III to Notification No. 43/2017). 4. M/s. Soft turf had submitted that they are engaged in the manufacture and supply of Carpets and Mats also known as PVC Carpet mats (herein after referred as carpets mats).....
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....le floor coverings, whether or not made up). 8. It is further submitted that the present application is maintainable under Section 97 of KSGST Act, 2017. 9. The applicant contents that the carpet mats manufactured are classifiable under Tariff Item 5705.00.49 of Customs Tariff Act, 1975 and in view of entry 146 of the Schedule-II of the Notification 01/2017 Integrated tax date 28 June 2017, the applicable rate of GST on the PVC carpet is 12%. It is also submitted that this application is preferred on the apprehension that the activity could be considered as a supply of goods under Sl. No. 43 of Schedule IV of the Notification No. 1/2017 Integrated tax |(rate) pertaining to Floor coverings made of plastic, which attracted rate of tax at the rate of 28% upto 14/11/2017 and @ 18% from 15/11/2017 as per Sl. No. 104A of Schedule-III inserted by Notification No. 43/2017-Integrated Tax (rate) dated 14/11/2017. 10. It is further submitted that the Govt. of India, on the recommendations of the Council, has vide Notification No. 1/2017-Integrated Tax (Rate), dated 28-06-2017, (as amended) notified the rate of the IGST that shall be levied on the inter-State supply of goods. As per t....
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....bare perusal of the Tariff that the two competing headings for the classifiation of PVC carpet mats are chapter headings 3918 and 5705. 15.1 The entry for 5705 is being reproduced for ease of reference Chapter/Heading/Sub-heading/Tariff Item Description of goods 5705 Other carpets and other textile floor coverings, whether or not made up. - Other carpets and other textile floor coverings, whether or not made up. --- Carpets. --- Durries; Of Jute: --- Carpets, Carpeting, rugs, mats and mattings; 5705 00 42 --- Mats and Mattings including Bath Mats, where cotton predominates by weight, of handloom, cotton rugs of Handloom. 5705 00 49 --- Other 5705 00 90 --- Other 15.2 Note 1 of Chapter 57 of CTA 1975 provides the kind of products which are covered under this Heading. The said Chapter Note is reproduced below : "For the purpose of this chapter, the term 'carpet and other textile floor coverings' maeans floor coverings in which textile materials serve as the exposed of the article when in use and includes articles having the....
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....pet, without involving any weaving process results in a non-woven textile fabric. 18. It is also submitted that PVC carpet mat produced and supplied by the applicant, in its entirety, whether removed in forms of big roll or in rectangular shapes is used only to cover a small part of the floor. Chapter note 1 of the Chapter 57 of the HSN explanatory notes, explain 'Carpets and other textile floor coverings' as under : 'Carpets and other textile floor covering' to be floor covering in which textile materials serve as the exposed surface of the article when in use and includes articles having the charateristics of textile floor coverings but intended for use for other purposes'. The chapter does not cover: a. Floor coverings underlays, i.e., coarse fabric or felt paddig placed in between the floor and the carpet (classified according to its constituent material). b. Linoleum and other floor coverings consisting of a coating or covering applied on a textile backing (heading 59.04) 19. In view of the above understanding of 'carpets and other textile floor coverings' it is submitted that since the textile material i.e., PVC mono filament yarn, f....
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.... 'carpets and other floor coverings' the terms 'parts and accessories' which can be considered more specific. Even if the claim of the Department that at no state the carpets come into existence is accepted, it cannot be denied that the article can be considered as other floor coverings meant for other application. We also find that in the interpretive notes for rule 3(a) in HSN, where by way of an example, it has been clarified that 'textile carpet identifiable for use in motor cars to be classified not as accessories of motor cars in heading 8708 but in heading 5703 where they are more specifically described as carpets'. Though, in common parlance the impugned product may not be considered as carpets, in view of the wordings of the chapter, the section notes, chapter notes and the explanatory notes extracted above, we are of the considered opinion that the impugned goods is correctly classifiable under chapter heading 5703.90.90 as claimed by the assessee". 22. The applicant also places reliance on CCE, Bhubaneshwar-I Vs. Champadany Industries Ltd. Reported in 2009 (241) ELT 481 (SC), wherein the Hon'ble court considered the classification of 'Jut....
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....ile as per report produced by petitioner from Regional Laboratory Bangalore and also report used by Customs in classifying the product issued by Regional Laboratory, Textiles committee Kannur. The applicant also relies on explanations under Chapter 57 of Customs Tariff Act, 1975. It also contended that the dealers have been paying Tax under HSN 5705 at applicable rate @ 12%. 25. DISCUSSION & FINDINGS 25.1 We have through the facts of the case, in the application for advance ruling filed by M/s. Soft Turf and various submissions made by the applicant in course of proceedings before the lower authority and before us including during the course of personal hearings, the manufacturing process of the commodity, samples of the commodity and other evidences on record. The issues for determination before us are as follows : 1. Whether the impugned goods viz. PVC Carpet mats are classifiable under Tariff Item 5705 00 49 as claimed by the applicant and held by the CGST Member or under Tariff Item 3918 as held by the SGST Member; and 2. Consequently whether the said impugned goods are chargeable to GST @ 12% in terms of entry 146 of Schedule-II of the Notification No. 1/2017-Integ....
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....the intermediate process. Said monofilament is made of PVC, plasticizer, CaCO3, lime powder etc. As per manufacturer, a non-woven material of PVC monofilament forms the upper surface of the product with a PVC backing as the base, and the product is essentially for use as floor covering. These facts including that the said goods are predominantly made of Poly Vinyl Chloride, are not in dispute. 25.4 The two competing entries in the Tariff which contain description of the goods covered therein and the description emerging from the respective Notification 1/2017-Integrated Tax (rate) or 43/2017-Integrated Tax (rate) are as under : 25.4.1 3918 : "Floor Coverings of Plastics, whether or not self-adhesive, in rolls or in form of tiles; wall of ceiling coverings of plastics" The relevant extract of chapter heading 3918 in Customs Tariff is as follow : Tariff Item Description of goods Unit (1) (2) (3) 3918 Floor covering of plastics, whether or not self adhesive, in rolls or in the form of tiles: wall or ceiling covering of plastics, as defined in note 9 to this chapter 3918.10 Of polymers of vinyl chloride 3918.10.10 Wall or....
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...., sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975. (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification." Thus, for the purpose of GST, Classification of goods under any tariff item/sub-heading/heading/chapter shall be done using the General rules of interpretation of the First Schedule of the Customs Tariff Act, 1975 including the Section and Chapter Notes and the General Explanatory Notes to the HSN of the First Schedule of the CTA, 1975. 25.6 We note that Textile & Textile articles are covered by various chapters under Section XI, while Plastics and Plastic articles fall under Chapter 39 of Section VII. Hence, respective section/chapter notes and HSN Explanatory notes relating thereto would be applicable. The applicant has claimed that their product being in the nature of textiles is excluded from chapter 39 of Tariff by virtue of Chapter note 2(p) of chapter 39 and the same is covered udder Chapter 57 by virtue ....
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....der Chapter 39 (section VII), the same shall be covered under Tariff Item 3918. 25.11 We observe that the impugned product under discussion has non-woven material made up of PVC on surface, which is coated/laminated with plastics (PVC), which is not in dispute. Hence, by virtue of said Section 1(h) to Section XI (Textiles and Textile articles), same gets excluded from the scope of being Textile & Textile articles under Section XI i.e. Chapters 50-63. 25.12 We further note that the General notes to Chapter 39 in HSN about Plastics and Textile combinations, reads as under : "Plastics and Textile Combinations Wall or ceiling coverings which comply with Note 9 to this chapter are classified in heading 39.18. Otherwise, the classification of plastics and Textile combinations is essentially governed by Note 1(h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59. The following products are also covered by this Chapter : (a) Felt, impregnated, coated, covered or laminated with plastics, containing 50% or less by weight of textile material or felt completely embedded in plastics; (b) Textile fabrics and non-wovens, either completely embedded in plastics or entir....
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....covered on both sides with such materials, provided that such coating or covering can be seen with the naked eye with no account being taken of any resultant change of colour (Chapter 39 or 40); or (c) Plates, sheets or strips of cellular plastics or cellular rubber combined with felt or nonwovens, where the textile material is present merely for reinforcing purposes (Chapter 39 or 40). "Note 2 to Chapter 59 reads : 1. Except where the context otherwise requires, for the purposes of this Chapter the expression "textile fabrics" applies only to the woven fabrics of Chapter 50 to 55 and headings 58.03 and 58.06, the briads and ornamental trimmings in the piece of heading 58.08 and the knitted or crocheted fabrics of headings 60.02 to 60.06. 2. Heading 59.03 applies to : (a) Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square metre and whatever the nature of the plastic material (compact or cellular), other than: (1) Fabrics in which the impregnation, coating or covering cannot be seen with the naked eye (usually Chapters 50 to 55 or 60); for the purpose of this provision, no account should be taken of any resultin....
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....d yarns, natural and manufactured and most products for which these are a principal raw material" we also find that the definition of 'Textile' and 'Textile material' as available in the Fairchild Books Dictionary of Textiles is as under : Textile - Derived from the Latin term textiles, which is based on the verb texere, to weave. 1. A broad classification of materials that can be utilized in constructing fabrics, including textile fibres and yarns. 2. Designates the constructed fabric including woven, knitted and non-woven structures as well as lace and crochet goods. 3. Descriptive of processes, organizations, personnel associated with the manufacture of products from fibres or yarns. Textile Material- An inclusive term of fibres, yarns, fabrics and products that retain relatively the same tensile strength, flexibility and properties of the original fibres. From the above definitions, it is inferred that textile refers to fabric of any nature and textile material includes fibre, filaments and yarns which are primarily used to manufacture textiles, or fabric. 25.17 Coming to the goods in question, the exposed surface of the article does not contain fabric or f....