TaxTMI 
TaxTMI 
2025 (12) TMI 632
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....No. 09/2023CT (Rate) Dt. 26.07.2023, GST Rate on Imitation Zari was reduced from 12% to 5% vide Entry No. 218AA; • that imitation zari is also known as Kasab, Saima, Babka, Chumki, Gota, Sitara, Naqsi, Kora, Glass Beads, Badla, Gizai etc; • that Kasab Thread is nothing but a Metallised Yarn therefore it can be safely concluded that the "Metalized Yarn" is nothing but Imitation Zari which is popularly know in local market as "Kasab" or "Badla". 4. The applicant also submitted the below mentioned chart depicting the manufacturing process of imitation zari thread or yarns along with their application for Advance Ruling: 5. They further submitted that earlier imitation zari or yarn under HSN 5605 was leviable to GST @ 12% in terms of Sr. No. 137 of schedule II of notification No. 1/2017-Central Tax (Rate) dated 28.6.2017. Subsequently, serial No. 218AA [Inserted vide vide notification No. 09/2023-Central Tax (Rate) dated 26.07.2023] has been inserted in schedule-I of notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 wherein GST rate on imitation zari is reduced from 12% to 5%. 6. It is the applicant's plea that as there is no specific menti....
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....ilm falling under HS 5605 are covered by Sl. No. 218AA of Schedule 1 attracting 5% GST; • that Metalized Yarn is made using a core material, such as polyester or nylon, coated with a thin metallic layer. Metallic Yarn, on the other hand, broadly refers to yarns with a metallic finish, which are produced by wrapping, twisting or combining metal strips or films with yarns; • that both Metalized Yarn and Metallic Yarn are generally classified under HSN 5605, which includes similar textile materials. It is further concluded by the division that Metalized Yarn may be classified under HSN 56050020. If the product falls under this classification, the concessional GST rate of 5% is applicable from 27.07.2023. 9. Personal hearing was granted on 23.01.2025 wherein Shri Hardik Shah (CA) appeared on behalf of the applicant and reiterated the facts as stated in the application. 10. In pursuance to the change in Member (State), a fresh personal hearing was held on 19.8.2025, wherein Shri Hardik Shah (CA) and Shri Mahesh S. Jariwala appeared and reiterated the submissions made in the application. 10.1 During the course of the personal hearing on 19.08.2025, the ....
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....e (e.g., gelatin) and then sprinkling it with metal powder (e.g., aluminium or bronze). The heading also covers products consisting of a core of metal foil (generally of aluminium), or of a core of plastic film coated with metal dust, sandwiched by means of an adhesive between two layers of plastic film. The heading covers multiple (folded) or cabled yarn containing plies of the yarn referred to above (e.g., fancy cords as used by confectioners, obtained by twisting together two or more metallised yarns as described above). It further includes certain other forms of yarn made in the same way and used for similar purposes, consisting of two or more parallel metallised yarns held together with a binding of metal thread or strip, and yarn or bundles of yarn gimped with yarn of this heading. Metallised yarn may be gimped. It is used in the manufacture of trimmings and lace and of certain fabrics, as fancy cords, etc. • Notification No. 01/2017 dated 28.06.2017 Schedule-II S.No Chapter / Heading / Sub-heading / Tariff item Description of Goods 137 5605 Metallised yarn, whether or not gimped, being textile yarn, or strip or the....
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.... film. 3. In light of the above, the GST Council has recommended to clarify that imitation zari thread or yarn made from metallised polyester film/ plastic film falling under HS 5605 are covered by SI No. 218AA of Schedule 1 attracting 5% GST. The GST Council has also recommended that no refund will be permitted on polyester film (metallised)/plastic film on account of inversion of tax rate. Requisite changes have been made in notification no. 5/2017-Central Tax (Rate) vide Notification no 20/223-Central Tax (Rate) dated [emphasis supplied] Section 97. Application for advance ruling .- (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought. (2) The question on which the advance ruling is sought under this Act, shall be in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; ....
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.... Real zari thread (gold) and silver thread combined with textile thread kg. 5605 00 20 --- Imitation zari thread kg. 5605 00 90 --- Other kg. 17. We would also like to reproduce the Minutes of the 15th GST Council Meeting and 52nd GST Council Meeting [relevant extracts]: 15th GST Council Meeting [relevant extracts] 9.8.12. The Joint Secretary (TRU-I), CBEC, stated that embroidery or zari articles falling under Chapter 58 was already agreed to be taxed at the rate of 5% in the last Council Meeting held in Srinagar (18-19 May, 2017). The Hon'ble Minister from West Bengal stated that zari should be in the exempt category and recalled that the Hon'ble Minister from Uttar Pradesh and the Hon'ble Deputy Chief Minister of Gujarat had made a similar suggestion during the last Council Meeting. The Hon'ble Minister from Odisha supported this proposal and stated that tax on handicrafts would affect the livelihood of artisans. The Joint Secretary (TRU-I), CBEC, stated that zari was also now made of metallised yarn in factories. The Hon'ble Minister from West Bengal stated that poor women worked on zari and the Secretary responded that small wor....
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.... thread combined with textile thread" and "Imitation zari thread or yarn known by any name in trade parlance" was excluded from Entry No. 137 in Notification No. 1/2017-CT (Rate) dated 28.6.2017. A new entry 218 AA attracting 5% GST was inserted namely "Imitation zari thread or yarn known by any name in trade parlance". 19. A conjoint reading of HSN 5605, read with notification Nos. 1/2017-CT (Rate) dated 28.6.2017 and 9/2023-CT (Rate) dated 26.7.2023 and circular dated 31.10.2023, minutes of the 15th GST Council meeting dated 03.06.2017, minutes of the 52nd GST Council meeting dated 31.10.2023 & clarification issued vide circular dated 31.10.2023 [all reproduced supra], lead us to a conclusion that metallic zari thread or yarn made from metallized polyester film/plastic film known by any name in trade parlance, would merit classification under HSN 56050020 & would hence be covered under serial no. 218AA and be leviable to GST @ 5%. 20. We also find that Notification 1/2017 has been superseded by Notification No. 9/2025-CT (R) dated 17.09.2025 w.e.f. 22.09.2025. In Notification No. 9/2025-CT(R), "Metallised yarn, whether or not gimped, being textile yarn, or strip or the like....