In re Stinzo Automotives Pvt. Ltd. (GST AAR Haryana)
The applicant is a manufacturer and supplier of Poly vinyl Chloride (PVC) foot mats for cars. Chapter 57 of the GST Tariff of goods deals with carpets and other textile floor coverings. Heading 5705 includes other carpets and other textile floor coverings, whether or not made up [such as Mats and mattings including Bath Mats, where cotton predominates by weight, of Handloom, Cotton Rugs of hand loom].
The general Heading 5705 talks about carpets and textile floor covering where cotton predominates by weight or made of handlooms or cotton rugs of handloom. No sub- heading of Chapter 57 covers carpets made of PVC yarn. A sample of the product i.e. the detachable foot mats was also produced before this Authority at the time of hearing and the Authority is convinced that neither any use of cotton is made in manufacturing of these foot mats and nor are they hand made.
So, it is amply clear that the product of the applicant is not covered under Chapter 57 or more specifically Sub-Heading 5705.
Now, arises the question as to under which Heading/ Sub-Heading does the product PVC foot mats fall. Chapter 39 of the GST Tariff – goods covers plastics and articles thereof. Heading 3904 of this chapter covers Polymers of Vinyl Chloride or of other Halogenated Olefins, in primary forms. As per the manufacturing process explained by the applicant, at the time of personal hearing as well as written submission, the car foot mats are made of PVC fibres, which are bounded to each other by way of liquid PVC coating. In this manner, the foot mats are made entirely of PVC and is clearly covered under the Sub-Heading 4904 10 which covers Poly Vinyl Chloride, not mixed with any other substances, taxable at 18%.
But as per Clause (p) of Note 2 of Chapter 39, goods of Section XI (Textiles and textile articles) are excluded from this chapter. Section XI deals with textiles and textile articles and Chapter 57 (carpets and other textile floor covering) form part of this section. The article manufactured and supplied by the applicant is neither covered under Chapter 57 nor any other chapter of Section XI. As such, the exclusion provided in Clause (p) of Note 2 of Chapter 39 is not applicable in case of the product of the applicant.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, HARYANA
1. Submission of the Applicant:
1.1 The application has been filed u/s 97 of the Haryana Goods & Service Tax Act, 2017 seeking an Advance Ruling in respect of the following question: “Whether the detachable foot mats used for motor vehicles, manufactured from PVC including TPU/Foam and sold in detachable condition as standalone products are taxable at 12% or 18%?”
1.2 The floor foot mats used for the cars are manufactured from PVC as the raw material and thus are also known as PVC carpet mats in the industry. The manufactured product is of running length generally which is cut into size as per requirement of the customers.
1.3 Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017 and Notification No. 1/2017 State Tax (Rate) specify the rate of CGST/SGST to be levied on different products along with their corresponding Chapter/ Heading/ Sub- Heading / Tariff item.
1.4 Entry No. 146 of Schedule II of the above Notifications cover the Chapter Heading 5705 and the same is quoted below:
