TaxTMI 
TaxTMI 
2025 (6) TMI 913
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....f the following questions. 1. What shall be the classification of the product based on its HSN? 2. What shall be the tax rate to be levied on the product? 01. FACTS AND CONTENTIONS - AS PER THE APPLICANT 1.1. The taxpayer is a partnership firm engaged in business of manufacturing and selling of 'Fruit Protection Bags' under the name and style of 'KR Innovation'. The taxpayer is registered under Goods & Services Tax and is regularly assessed to tax. 1.2 Fruit Protection Bag ("The Product) is a bag made out of kraft paper, white or colour MG poster paper and is used primarily as a covering / packing material for fruits before harvest. These are bags made out of coated paper, glued using synthetic adhesive. Further, ....
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....s attached as Annexure C. 1.7. Considering the facts above with respect to the nature of clientele, the firm is placed at disadvantage compared to its peers since charging GST at higher rates caused increase in total cost for the customer who is not eligible to claim ITC. Basis, the above facts, the taxpayer seeks advanced ruling with respect to classification of its goods basis HSN i.e 4805 or 48195090. Sample of The Product shall also be produced before the Proper Officer, if required. 02. STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW The two HSN Codes being similar causes a dilemma as regards classification of the fruit bags. However, charging a lower GST rate by the competitors put the taxpayer in a position of d....
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....paper, paperboard, cellulose wadding and webs of cellulose fibres, coloured or marbled throughout the mass by any method. Except where heading 48.03 otherwise requires, these headings do not apply to paper, paperboard, cellulose wadding or webs of cellulose fibres which have been otherwise processed. Technical description of HSN code 4805 describes it as other uncoated paper. But RTP is using process of coating of Chemical made by himself, which add special properties to paper such as anti-bacterial, anti-fungus, fly resistance, insect resistance, Protection of sun burn etc. So current HSN Code 4805 is not appropriate for manufacturing of fruit protection Paper bag. 04. HEARING Preliminary e-hearing in the matter held on 24.01.2025. M....
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....hat the product is sold to farmers and agriculturists who use them to protect the fruit from excessive sunlight, by covering the fruits with the said bag and fastening them with the help of the galvanized wire. It protects the fruits from rains, bird bites, fruit flies etc. Overall, it purportedly helps in better fruit produce with uniform colour, shape and size, enhancing its marketability. 5.2. In order to determine the classification and tax liability on said goods, we will be required to refer to the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 containing the headings, sub-headings as well as the rates of Central Tax GST applicable to various goods which are covered under 6 schedules are as under: (i) 2.5 per....
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....orked or processed than as specified in Note 3 to this Chapter. It includes fluting paper, Testliner (recycled liner board), Sulphite wrapping paper, filter paper and paper board, felt paper and paper board and others uncoated paper and paper board. On the other hand, we find that Chapter heading 4819 covers cartons, boxes, cases, bags and other packing containers of paper, paper board, cellulose wadding or webs of cellulose fibres, box files, letter trays and similar articles, of paper or paper board of a kind used in offices, shops or the like. The various tariff items under the said Tariff heading is as under :- 48110: - Cartons, boxes and cases of corrugated paper or paper board: 48191010 -- Boxes 48191090 ---....
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....rely paper and paper board, covered under 4805. Therefore, we find that the said product is not classifiable under Tariff Heading 4805. 5.5. On verifying the sample of the product attached with the application, we find that the product is manufactured out of coated kraft paper, sealed on three sides and provided with a tag/ galvanized wire to seal the fourth side after the fruit is inserted into the bag. We find that a bag is a product which covers the entire goods, completely enclosing them. On the other hand, sleeves are pouches designed to slip over the fruit or fruit clusters, providing a protective layer without completely enclosing them. In the instant case, the product before us is a bag which can completely cover the fruits. It i....