TaxTMI 
TaxTMI 
2026 (2) TMI 1065
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....s EASY FLUX POLYMERS PRIVATE LIMITED, 704, MUNGLAM FUNSQUARE, DURGA NURSERY ROAD, UDAIPUR-313001, RAJASTHAN (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97(2) given as under; (a) classification of goods and/or services or both A. SUBMISSION OF THE APPLICANT (in brief):- Brief facts of the case: Given the specific wording "Paper Sacks/Bags and bio-degradable bags" mapped to Chapters 39 & 48 in Schedule I, the Applicant submits that biodegradable bags-whether of plastic origin (Ch. 39) or paper origin (Ch. 48)-are specifically covered at 5% GST from 22-Sep-2025. The specific entry should prevail over general residual/generic entries for 3923 or paper articles placed in higher schedules. The exact 8-digit HSN may be determined based on material composition, size, and use, but the rate remains 5% by virtue of the specific notification entry. a) Presently, similar non-biodegradable/compostable plastic bags are generally classified under HSN 39232990 (Articles for the conveyance or packing of goods, of plastics). b) Pursuant to Not....
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....ingle-use plastic pollution. The applicant's product directly supports this objective and must therefore receive the concessional rate benefit. 5. No Contradiction or Overlap with Other Entries The entry for biodegradable bags / Compostable Bags stands independently and is not restricted by material composition. The heading linkage to both Chapters 39 and 48 demonstrates the Legislature's intent to cover biodegradable variants made from plastic, compostable polymer, or paper base. 6. Uniform Rate Applicability The rate of 5% (2.5% CGST + 2.5% SGST) applies uniformly from 22.09.2025 onwards to all biodegradable bags, whether supplied in bulk or pre-packaged, as per the specific notification. C. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT: 1) Classification/HSN: Whether the Applicant's biodegradable bags are classifiable under Chapter 39 (if of plastic/compostable polymer) or Chapter 48 (if of paper), and the appropriate HSN therein. 2) Rate of tax & applicability of notification: Whether supplies of the said biodegradable bags are covered by the entry "Paper Sacks/Bags and bio-degradable bags" (Ch. 39, 48) in Schedule I of Notification 9/2025-CTR....
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....of the Harmonized System of Nomenclature (HSN) code covers paper and paperboard, as well as articles made from paper pulp, paper, or paperboard 4. (ii) Entry 319 in Schedule-1 of notification 9/2025 Centre Tax Rate Dated 17-09-2025 covers, Paper Sacks/Bags and bio-degradable bags" whereas the taxable person is engaged in manufacturing and supply of plastic compostable bags bearing HSN-39232990, compostable straw bearing HSN-39241090 etc. As plastic compostable bags are not specifically notified in entry no. 319 in the said notification, therefore the rate of central tax/state tax levied on intrastate supply of goods should remains as 9%. (iii) No comments required. 5. Entry 319 in Schedule-1 of notification 9/2025-Centre Tax Rate Dated 17-09-2025 covers, Paper Sacks/Bags and bio-degradable bags" whereas the taxable person is engaged in manufacturing and supply of plastic compostable bags bearing HSN-39232990, compostable straw bearing HSN-39241090 etc. As plastic compostable bags are not specifically notified in entry no. 319 in the said notification, therefore the rate of central tax/state tax levied on intrastate supply of goods should remains as 9%. It is also stated....
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....We do not possess the jurisdiction to determine whether a product meets environmental, technical or scientific standards of biodegradability or compostability. Such determinations fall within the domain of statutory authorities such as the Ministry of Environment, Forest and Climate Change, the Central Pollution Control Board, or other agencies notified under relevant environmental laws. 6. We therefore observe that although a compostability certificate has been furnished, we are not the competent authority to verify or affirm whether the product is biodegradable or compostable, nor can we conclude on the sufficiency or correctness of the certification produced. We have neither examined any physical sample of the product nor have we seen the process or procedure followed in drawing the sample for testing. The determination of biodegradability or compostability is a scientific and technical matter falling within the jurisdiction of the environmental authorities and not within the scope of this Authority under Section 97(2) of the CGST Act. 7. We find that the bags in question are made from polymer materials and are classifiable under Chapter 39 - Plastics and articles thereof,....