In re Sunita Kohli (GST AAR Rajasthan)
The ruling in In re Sunita Kohli delivered by the Authority for Advance Ruling Rajasthan addresses issues relating to classification and applicable GST rate on biodegradable or compostable bags under the CGST Act 2017 and corresponding state law.
The applicant, a proprietorship concern engaged in manufacturing and selling packing materials such as carrying bags, including biodegradable/compostable bags, sought an advance ruling on two issues: (i) the correct classification/HSN of such bags, and (ii) applicability of concessional GST rate under Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025, effective from 22.09.2025. Prior to this notification, the products were classified under HSN 3923 29 90 (plastics) and taxed at 18%.
The applicant contended that the notification specifically covers “Paper Sacks/Bags and bio-degradable bags” under Chapters 39 and 48 with a concessional GST rate of 5%. It was argued that biodegradable bags, irrespective of whether they are made from plastic, compostable polymer, or paper, fall within this specific entry, and that a specific entry prevails over general classification entries. The applicant also submitted that its products meet biodegradable/compostable standards supported by certifications.
The Authority examined the submissions, documents, and relevant legal provisions. It noted that its jurisdiction under Section 97(2) is limited to matters such as classification and applicability of notifications. It expressly clarified that it does not have the authority to determine scientific or technical aspects such as whether a product is biodegradable or compostable. Such determinations fall within the domain of environmental or technical authorities.
