In re Aristocrat Industries Private Limited (GST AAAR West Bengal)
The West Bengal Appellate Authority for Advance Ruling (AAAR) has upheld the classification of PVC raincoats under HSN Code 3926 (plastics) and affirmed an 18% Goods and Services Tax (GST) rate. This decision, issued on May 5, 2025, addresses an appeal filed by Aristocrat Industries Private Limited against an earlier ruling by the West Bengal Authority for Advance Ruling (WBAAR). Aristocrat Industries had argued for classification under HSN Code 6201 (textiles), which would result in a 5% GST rate if the price was below ₹1,000.
The AAAR’s reasoning aligns with the WBAAR’s finding that PVC raincoats are non-woven products, manufactured by a fusion method of sealing plastic sheets rather than traditional weaving. The authority emphasized that the entire GST rate system relies on HSN classification, and a product’s material determines its category. It referenced Explanatory Notes to HSN Chapters 39 (plastics) and 62 (articles of apparel), noting that Chapter 62 specifically applies to “made-up articles of any textile fabric” and excludes items classified under HSN 39.26. Furthermore, HSN Explanatory Notes explicitly list “raincoats” under heading 39.26 as articles of apparel made by “sewing or sealing sheets of plastics.” The AAAR also cited a Supreme Court judgment in Porritts & Spencer (Asia) Ltd. vs. State of Haryana, which defined “textiles” as “woven fabric,” reinforcing that PVC, being a synthetic polymer, does not fall under this definition. Therefore, the AAAR concluded that PVC raincoats are correctly classified as plastic articles, not textile items, regardless of their end-use as apparel.
