TaxTMI 
TaxTMI 
2024 (9) TMI 664
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.... Plast industries Pvt Ltd., (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 2. Brief Facts of the case: 2.1 M/s TraPlast Industries Pvt Ltd., is a manufacturer of Natural Fiber Composite (hereinafter referred to as 'NFC') material, which is used to manufacture boards, doors and frames. The applicant uses the NFC to manufacture boards, doors and frames of different sizes and measurements. The said NFC is made of natural fibers such as rice husk, rice grass, wheat grass and coconut shell etc., 2.2 The process of manufacture of the NFC boards is known as extrusion and the same is explained as follows: The natural fibers are mixed with PVC of suspension polymer, additives like stabilizers, impact modifiers, UV resistant additives, LUBRICANTS, PROCESSING AIDS arc mixed in a High speed mixer for uniform and homogeneous blend and to remove the unwanted vapours in the powder. This process continuous up to 110 C centigrade and then dropped to a cooling mixture, where it is cooled and taken for the process of: • Extrusion • Sizing • Traction • Cutting * Extrusion: PVC....
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....ling by this Hon'ble Advance Ruling Authority as to the appropriate rate and classification of GST to be charged. 4. Proceedings if any pending: 4.1 On Verification of basic information of the applicant, it is observed that the applicant is under State Administrative jurisdiction i.e, Guntakal Circle, Ananthapur Division. Accordingly, the application has been forwarded to the jurisdictional State Tax authorities to offer their remarks as per Sec. 98 (1) of CGST/APGST Act 2017. 4.2 In response, remarks arc received from the State jurisdictional officer concerned stating that no proceedings lying pending with the issue, for which the advance ruling sought by the applicant. 5. Admissibility of the application: The question raised as above appeared to fall under section 97 (2) (a), (b) and (e) of CGST/SGST Act, 2017, as no proceedings on the same is pending, the application, as advance ruling is admitted and applicant has paid fee through Electronic Cash Ledger (debited CGST 5000/- & SGST 5000/-) vide reference no. DC3705240043071. 6. Applicant's Interpretation of Law 6.1 The applicant is into the manufacture of NFC boards, doors and frames. NFC boards are ....
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....t the product in question falls under Heading 44.10 for the reasons explained below. 6.6 Particle board is a flat product manufactured in various lengths, widths and thicknesses by pressing or extrusion. It is usually made from wood chips or particles obtained by the mechanical reduction of round wood or wood residues. It may also be produced from other ligneous materials such as fragments obtained from bagasse, bamboo, cereal straw or from flax or hemp shives. Particle board is normally agglomerated by means of an added organic binder, usually thermosetting resin, which generally does not exceed 15% of the weight of the board. 6.7 The chips, particles or other fragments constituting the particle boards of this heading arc usually recognizable at the edges of the board with the naked eye. However, in some cases, microscopic examination may be required to distinguish the particles and fragments from the ligno-cellulosic fibers characterizing the fiber board of heading 44.11. 6.8 The particle boards are usually sanded. Moreover, they may be impregnated with one or more substances not essential for the agglomeration of their constituent materials but which confer on the board....
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....c) Botanical origin, it covers an organic substance associated with cellulose in the cell walls specially of the xylem on wood of many plants. This meaning of 'lignin' would indicate that the word 'ligneous' used in the Entry 44.06, would cover a particle board, made up by using any part of plant material with Resin. 'Rice Husk' is part of Rice Plant being other cover of the Rice grain, which is used in this case, along with Resin/Glue, Bamboo, Cereal Straw, flax or hemp shieves and the resultant 'boards' would be thus covered by heading 44.06. 6.12 The applicant submitted that as per the decision of the Hon'ble CESTAT in the above case, any product which has a botanical origin and covers an organic substance associated with cellulose in the cell walls specially of the xylem would fall under the category of "other ligneous material whether or not agglomerated with resins or other organic binding substance (other than specified boards)." The term ligneous as per the New Webster's Dictionary of English, means "of or resembling wood." Therefore, the organic material used by the applicant arc the hard protecting coverings of grains of rice/ na....
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..... d) Boards of ligneous materials agglomerated with cement, plaster or with other mineral binding substances (heading 68.08). Also excluded from this heading are goods having the character of articles or parts of articles more specifically covered elsewhere, whether obtained directly by pressing, extrusion or moulding or by other processes. 6.16 The PVC used by the applicant has a supplementary function of holding together the ingredients for manufacturing the NFC board and since the PVC is not the dominant ingredient, the said board would fall under Chapter 44. Thus, the exclusion mentioned above especially under point "a" is not all applicable. 6.17 In view of the foregoing the applicant wishes to submit that as per the manufacturing process explained above, it is evident that the major proportion of raw material used is the natural fiber which is nothing but rice husk and coconut shell powder. The other materials such as recycled material & processing addictive and PVC resin are comparatively less in proportion as compared to the natural fiber. The PVC resin, acts as a binding agent of all the other raw materials used. Thus, the major proportion of raw material....
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.....06.2017 as amended in respect of goods and that of SGST is notified vide Notification No. vide G.O. (Ms) No. 62 dated 29.06.2017 as amended. As per SI. No 92 of Schedule-II of the Notifications, specifies the following goods falling under Chapter 44 or any other Chapter are subject to 6% CGST. The said entry is as follows: 92 44 or any Chapter The following goods, namely: - a. Cement Bonded Particle Board; b. Jute Particle Board; c. Rice Husk Board; d. Glass-fibre Reinforced Gypsum Board (GRG) e. Sisal-fibre Boards; f. Bagasse Board; and g. Cotton Stalk Particle Board h. Particle/fibre board manufactured from agricultural crop residues From the above, it may be observed that Rice Husk Board or fibre board manufactured from agricultural crop residues, irrespective of the Chapter under which the same are classified, are subjected to CGST @ 6% and 6% SGST. 7. Personal Hearing: A personal hearing was conducted on 19.06.2024, which was attended by the authorized representative, Sai Makarandh, Advocate, who has filed Vakalat for authorization on dated 10.04.2024 and reiterated the submissions made in the application and further directed to....
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....AAHCT6584E1ZY, under administrative control of "State" and on the rolls of Guntakal Circle, Anantapur Division. The applicant is a manufacturer of Natural Fibre Composite (hereinafter referred to as 'NFC') material, which is used to manufacture boards, doors and frames of different sizes and measurements. The said NFC is made of natural fibres such as rice husk, rice grass, wheat grass and coconut shell etc., As per the applicant, it is a material composed of natural fibres (coconut shell husk) and offers a range of advantages, including exceptional durability, low maintenance requirements and is resistant to moisture and heat. The process of manufacture of the NFC boards is known as extrusion and the same is explained as follows: The Natural fibres are mixed with PVC of suspension polymer, additives like stabilizers, impact modifiers, UV resistant additives, LUBRICANTS, PROCESSING AIDS are mixed in a High speed mixer for uniform and homogeneous blend and to remove the unwanted vapours in the powder. This process continuous up to HOC centigrade and then dropped to a cooling mixture, where it is cooled and taken for the process of: • Extrusion â....
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....he applicant with mam content as Rice husk, will more appropriately be classified under CTH 441193, the applicable rate of GST is taken up for consideration. The rate of CGST is notified vide Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 as amended in respect of goods and that is notified vide Notification No. vide G.O. (Ms) No. 62 dated 29.06.2017 as amended. As per SI. No 92 of Schedule II of the Notifications, specifics the following goods falling under Chapter 44 or any other Chapter are subject to 6% CGST. The said entry is as follows: 92 44 or any Chapter The following goods, namely: - a. Cement Bonded Particle Board; b. Jute Particle Board; c. Rice Husk Board; d. Glass-fibre Reinforced Gypsum Board (GRG) e. Sisal-fibre Boards; f. Bagasse Board; and g. Cotton Stalk Particle Board h. Particle/fibre board manufactured from agricultural crop residues From the above, it may be observed that Rice Husk Hoard or fibre board manufactured from agricultural crop residues, irrespective of the Chapter under which the same are classified, are subjected to CGST @ 6% and 6 % SGST. In view of the above discussions, we Rule as under: "Natural F....