Ministry of Finance
Department of Revenue, New Delhi
Subject: Circulation of the views of Development Commissioner (Handicrafts) regarding classification of metallic yarn made out of duty paid metallised lacquered polyester film as “zari” – reg.
I am directed to refer to Board”s Circular No. 15/88-CX.I (F.NO. 13/7/88-CX.I) dated 25.4.88 wherein it was clarified that Board considers Zari and Zari items as “handicrafts” eligible for exemption under Notification No. 76/86 dated 10.2.86.
2. A doubt has now arisen whether imitation or real zari made from duty paid metallised polyester film is also classifiable as “handicrafts” and entitled to exemption as “handicrafts” in spits of the withdrawal of exemption to metallised polyester yarn.
3. It has been clarified by the Office of Development Commissioner (Handicrafts) that imitation or real zari made of gold, silver thread or man-made metallic yarn made out of duty paid polyester film (metallised / lacquered) namely Kasab, Kalabatu, tilla, wire thread and metallic yarn have been specifically as “handicrafts”. As the Development Commissioner (Handicrafts) treats such products as “handicrafts”, the same may be treated as “handicrafts” for the purpose of Notn. No. 76/86-CE dt. 10.2.86.