TaxTMI 
TaxTMI 
2025 (3) TMI 238
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....ions, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression "GST Act" would mean the CGST Act and the WBGST Act both. 1.2 The applicant is engaged in the manufacture and supply of raincoats primarily composed of polyvinyl chloride (PVC), a synthetic polymer widely recognized for its durability and water-resistant properties, which makes it suitable for protective outerwear. 1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there under seeking an advance ruling in respect of following questions: • (i) Whether PVC raincoats should be classified as plastic (HSN Code 3926) or textile....
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....der HSN Code 3926, which applies to plastic articles, or under HSN Code 6201, which pertains to textile articles of apparel. In this context, the applicant relies on a recent ruling by the Customs Authority for Advance Rulings (CAAR) in the case of NZ Seasonal Wear Pvt. Ltd., which classified similar PVC raincoats under HSN Code 6201, recognizing them as textile garments due to their composition and intended use. 2.4 The applicant submits that the classification question rests on the interpretative provisions of the Customs Tariff Act, 1975, along with the explanatory notes and provisions under CGST Notification 01/2017 - Central Tax (Rate). Explanations (iii) and (iv) in this notification establish that the Customs Tariff's section notes, chapter notes, and interpretative guidelines are binding for determining GST classifications. Judicial precedents further affirm the significance of these interpretative notes in ensuring consistent and accurate classifications. The applicant contends that, based on the specific construction and functional characteristics of PVC raincoats, classification under HSN Code 6201 as an article of apparel is most appropriate. 2.5 The applicant sub....
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....swimwear). Plain reading of these two headings makes it clear that heading 6201 is the most suitable heading to cover raincoat, moreover, CTI 6201 4010 specifically covers--Overcoats, raincoats, car-coats, capes, cloaks and similar articles of man-made fibres." 2.7 The classification of goods and their corresponding GST rates are governed by the Schedule provided in CGST Notification 01/2017 - Central Tax (Rate). Since the notification does not enumerate rates for every individual goods, Explanations (iii) and (iv) serve as crucial interpretative guidelines. These Explanations stipulate that: (iii) The terms "tariff item," "sub-heading," "heading," and "chapter" shall carry the same meanings as assigned to them in the First Schedule to the Customs Tariff Act, 1975. Consequently, the classifications specified in the First Schedule are directly applicable. (iv) For the purpose of interpreting this notification, the rules contained in the First Schedule to the Customs Tariff Act, 1975-including section notes, chapter notes, and general interpretation notes-shall be applicable. The legal significance of these section and chapter notes has been judicially affi....
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.... a more general description. • This principle of specific classification prevailing over general classification has been judicially affirmed by the Honourable Supreme Court in Commercial Tax Officer v. Binani Cement Limited [2014 (3) SCR 1]. Material Specification: • PVC, being a man-made fiber, is specifically covered under subheading 620140 • The explicit mention of raincoats within this subheading provides the most specific classification for PVC raincoats. The systematic and specific inclusion of raincoats within Chapter 6201, coupled with the established legal principle that specific headings prevail over general ones, strongly supports the classification of PVC raincoats under 620140. This classification is not only logical but also aligned with judicial precedent and the General Rules of Interpretation of the Customs Tariff Act, 1975. This comprehensive analysis, supported by both legislative framework and judicial interpretation, conclusively establishes that the appropriate classification for PVC raincoats is under Chapter 62014010, as it provides the most specific and accurate description of the product in question. HS....
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....here, which requires that the terms "textile" and "fabric" be interpreted according to their conventional meanings in commercial and general trade contexts. Comprehensive View of Textiles The "Encyclopedia of Textiles, Fibres and Nonwoven Fabrics," edited by Martin Grayson and published by Wiley-Interscience, presents a comprehensive definition of textiles. This definition underscores the significance of textiles in everyday life, emphasising their essential role in providing protection and comfort through clothing. Additionally, textiles fulfil critical functions in various household items, including bedding, upholstery, carpets, curtains, and wall coverings. Their applications extend to industrial contexts, where they are utilised in products such as tyres, tents, filters, conveyor belts, and insulation materials. According to the Encyclopedia, textile materials are derived from fibres, comprising short strands and filaments, representing long, continuous strands processed into diverse fabric types. Woven fabrics are produced by twisting fibres into yarn and interlacing them into sheets, while knitted fabrics are fabricated by looping the yarn. Nonwoven fabrics ....
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....ication categorizes fibres based on polyvinyl chloride (PVC) as man-made. Additionally, the "Textile Terms and Definitions Tenth Edition" corroborates this classification by presenting a flowchart that categorizes textile fibres into natural and man-made groups. The man-made category encompasses synthetic polymer fibres, including polyvinyl derivatives and fibres manufactured from PVC chlorides. 2.12 Judicial Precedent and Evolution of Textile Definition The applicant cites the Honorable Supreme Court judgment in Porritts & Spencer (Asia) Ltd. - 1983 (13) E.L.T. 1607 (S.C.), which articulated that the term "textiles" is derived from the Latin word "texere," meaning "to weave," and encompasses any woven fabric. The Court recognised that despite advancements in technology that have introduced new materials and techniques, woven fabrics continue to be classified as textiles, regardless of the material, technique, or intended use. Notably, plastics are acknowledged as a textile material, enabling the production of various yarns and fabrics, including Teflon, polyester, nylon, acrylic, texturised, and silicone yarns. In the case of CCE Shillong v/s Woodkraft (1995 3 SCC 454), t....
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.... that raincoats and caps are to be classified as "articles of ready to wear apparel" (known commercially as ready-made garments) under Item 22D of the Central Excise Tariff. The Court emphasized that the Tribunal had adopted a reasonable approach in this classification, and explicitly stated that "no interference with the classification is called for." 2.13 Established Commercial Practices in the Textile Industry Established commercial practices in the textile and garment industry significantly influence the classification and treatment of various products. Although constructed from synthetic materials, PVC raincoats are widely acknowledged and marketed as textile garments due to their functional characteristics and intended applications. These raincoats are specifically designed to offer protection against adverse weather conditions, a primary function commonly associated with textile apparel. Retailers and manufacturers typically categorize and present PVC raincoats alongside other textile garments, which reflects their acceptance within the broader textile category. This practice aligns with industry norms, wherein a product's functional attributes and consumer percept....
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....cally stipulates: "This Chapter does not cover: (p) goods of Section XI (textiles and textile articles)." (iv) Application to PVC Raincoats The manufacturing process of PVC raincoats, as detailed earlier, clearly demonstrates that the end product is a readymade garment. While PVC is utilized as a component material, the essential character and function of the product remain that of a garment. The mere presence of PVC in the construction does not automatically render it an article of plastic, particularly given the explicit exclusions noted above. 2.16 A harmonious reading of these provisions leads to the inescapable conclusion that PVC raincoats cannot be classified under Chapter 39. The Chapter Notes explicitly exclude textile articles, and the nature of PVC raincoats as readymade garments places them squarely within the scope of textile articles, regardless of their PVC composition. This interpretation aligns with both the letter and spirit of the classification system, which recognizes that the ultimate form and function of a product may differ from its constituent materials. Therefore, the classification of PVC raincoats under Chapter 39 would be inconsi....
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....es that textile materials are natural fabrics whereas PVC is synthetic polymer in nature and does not fall under the category of natural fabrics. Thus, raincoats made of PVC may be classified under chapter heading pertaining to plastic i.e. HSN 3926. Accordingly, GST rate may be levied as per HSN 3926. 4. Observations & Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorized representatives of the applicant during personal hearing. We have also considered the submission made by the officer concerned from the revenue. 4.2 The applicant is stated to be engaged in the manufacture and distribution of raincoats predominantly made from polyvinyl chloride (PVC), a synthetic polymer known for its water-resistant properties, making it ideal for rain protection. These PVC raincoats are designed as outerwear garments, comprising PVC sheets that are meticulously assembled and reinforced with zippers, drawcords, buttons, and stoppers, thereby creating a finished product ready for commercial distribution. 4.3 The applicant wants a ruling for clarification whether raincoat made from polyvinyl chloride (PVC), a synthetic....
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....s such as polyester zippers, drawcords, buttons, and plastic stoppers are attached to finalize the product, which is then distributed to the market as a finished raincoat. 4.5 We find that the Hon'ble Supreme Court in case of Commercial Tax Officer v Binani Cement Ltd [2014 (3) SCR 1] emphasized on latin maxim of generalia specialibus non derogant i.e, general law yields to special law when operate in the same field on same subject. In the case in our hand, there can be no denying that the only function of using raincoat is to take shield from rain and therefore, it is used as garment/apparel in common parlance. 4.6 In case of Bengal Waterproof Limited vs Commissioner of Central Excise on 27 March, 2007, the Customs, Excise and Gold Tribunal, Kolkata vouched the classification of rainwear as textile fabric despite its rubberized composition and thus observed as follows: "articles of apparel made of Rubberised Textile Fabric shall only be of such kind classifiable under heading 62.011" 4.7 Further, the hon'ble Supreme Court in case of Porritts & Spencer (Asia) Ltd. A vs State of Haryana on 6 September, 1978 observed as follows: "the word 'textiles is d....
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....th a spread of mix is passed through rollers and thereby the mix gets properly and evenly coated on the fabric. The said processed fabric with a coat of the above mix is then cured which results in proper bonding between mix of rubber and chemicals with the cotton fabric and the fabrics get rubberised. The outcome so arrived is called rubberised textile fabrics. Such rubberized textile fabric is the basic raw-material to make rainwear through the process of cutting, stitching and all other activities." 4.9 Admittedly the item manufactured by the applicant is a non-woven product as the applicant himself has submitted that it employs a fusion method, wherein the parts are thermally or chemically bonded to form a seamless, non-woven product. In order to analyze whether PVC sheet can be regarded as textile material thereby to qualify to be a woven fabric, we have explored the manufacturing process of PVC sheet in the internet and from the website of petronthermoplast.com, we find such process as follows: "Polyvinyl Chloride, commonly known as PVC, is a synthetic polymer derived from the vinyl chloride monomer. It is produced through a polymerization process that involves co....
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....der, a machine that melts the mixture to form a uniform molten mass. The molten PVC is then forced through a die, which imparts the desired shape and thickness to the sheet. The extrusion process can be either calendering or flat-die extrusion, depending on the type of sheet being manufactured. 5. Cooling and Sizing After the extrusion process, the freshly formed PVC sheet undergoes cooling to solidify its shape and size. Proper cooling is essential to prevent warping or deformities in the final product. The sheet is then trimmed and cut to the required dimensions. 6. Embossing (Optional) In some cases, the PVC sheet may undergo an embossing process to add textures or patterns to its surface. This is achieved through the use of embossing rollers, which press the desired design onto the sheet during the cooling process. 7. Surface Treatment (Optional) For specific applications, the PVC sheet may undergo surface treatment to enhance its properties. Surface treatments can include corona treatment to improve printability or the application of coatings to increase chemical resistance." 4.10 In view of the aforesaid manufacturing p....