TaxTMI 
TaxTMI 
2025 (12) TMI 631
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....real zari became very costly and hence, was substituted with imitation zari; • that imitation zari can also be made from plastic film/lacquered coated polyester film on which aluminium metal is used to give a shiny look like real zari; • . that lacquered coated polyester film when cut/slitted into small thread is known as "Zari Badla" (metallic yarn) in common trade parlance; • . that when 'Zari Badla' is twisted with any type of yarn like polyester, viscose, nylon it is called "Zari Kasab" in common trade parlance. • that this 'Zari Badla' & 'Zari Kasab' is widely used as imitation zari in sarees & other dress materials in place of real zari. 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: PROCESS OF MAKING IMITATION ZARI THERAD OR YARN PLASTIC / POLYESTER FILM ↓ ALLUMINIUM METAL FILM ALLUMINIUM COATING IS DONE ON THE POLYESTER FILM/PLASTIC FILM THROUGH MACHINE ↓ LACQUER COATED FILM DIFFERENT COLOUR COATING DONE ON ALLUMINIUM METAL FILM ↓ BADLA ZARI/MET....
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....of the appellant and reiterated the submissions made in the application. Discussion and findings 10. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 11. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submission/interpretation of law in respect of question on which the advance ruling is sought. 12. Before adverting to the submissions made by the applicant, we would like to reproduce the extract of the relevant extract of the Customs Tariff Act, 1975, HSN, notification, circular, for ease of reference: • CUSTOMS TARIFF NOTES OF CHAPTER 5605 56.05 56.05 - Metallised yarn, whether or not gimped, being textile yarn, or strip or the like of heading 54.04 or 54.05, combined with met....
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....s shall be inserted, namely: - (1) (2) (3) "218AA. 56050020 Imitation zari thread or yarn known by any name in trade parlance"; B. in Schedule II -6% :- in Schedule II-6%, against S. No. 137, for the entry in column (3), the entry "Metallised yarn, whether or not gimped, being textile yarn, or strip or the like of heading 5404 or 5405, combined with metal in the form of thread, strip or powder or covered with metal, other than- (i) real zari thread (gold) and silver thread combined with textile thread (ii) imitation zari thread or yarn known by any name in trade parlance" shall be substituted; • Circular No. 205/17/2023-GST dated 31.10.2023 Subject: Clarification regarding GST rate on imitation zari thread or yarn based on the recommendation of the GST Council in its 52nd meeting held on 7th October, 2023-reg. 2. Doubts have been raised whether metal coated plastic film converted to metallised yarn and twisted with nylon, cotton, polyester or any other yarn to make imitation zari thread is covered under SI No. 218AA of Schedule I covering imitation zari thread or yarn, and attracting 5% GST, ....
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.... slitted polyester metallized film. Metallic Zari is the work which is in vogue as it weighs quite lightly compared to pure gold and silver or for that matter copper. It is also affordable and more durable compared to Real Zari and Imitation Zari. [source https://www.utsavpedia.com/motifs-embroiderics/ zari-the-ultimate-precious-metal-weaving-art/| 15. The Customs Tariff with respect to HSN 5605, is reproduced below for ease of reference viz 5605 METALLISED VARN, WHETHER OR NOT GIMPED. BEING TEXTILE YARN, OR STRIP OR THE LIKE OF HEADING 5404 OR 5405, COMBINED WITH METAL IN THE FORM OF THREAD, STRIP OR POWDER OR COVERED WITH METAL 5605 00 - Metallised yarn, whether or not gimped. being textile yarn, or strip or the like of heading 5404 or 5405, combined with metal in the form of thread, strip or powder or covered with metal 5605 00 10 --- Real zari thread (gold) and silver thread combined with textile thread Kg. 5605 00 20 --- Imitation zari thread kg. 5605 00 90 --- Other kg. 16. We would also like to reproduce the Minutes of the 15th GST Council Meeting and 52nd GST Council Meeting ....
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....t of inversion. Decision: The Council approved the issue of clarification as recommended by the Fitment Committee that imitation zari thread or yarn made from metallised polyester film/plastic film are covered under heading 5605 and levied to 5% GST and recommended that no refund will be permitted on polyester film (metallised)/ plastic film on account of inversion in duty structure. 17. We find that the confusion had arisen, as prior to 26.07.2023, "Metallised yarn, whether or not gimped, being textile yarn, or strip or the like of heading 5404 or 5405, combined with metal in the form of thread, strip or powder or covered with metal; such as Real zari thread (gold) and silver thread, combined with textile thread), Imitation zari thread" attracted 12 % GST [Entry No. 137 in Notification No. 1/2017-CT (Rate) dated 28.6.2017]. But after 26.07.2023, "Real zari thread (gold) and silver 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 a....