Polyspin Private Limited Vs State of Tamil Nadu & others (Madras High Court)
Madras High Court Stays further proceedings in challenge to residual entry at Serial No. 453 of Schedule III of the Rate Notification
The Hon’ble Madras High Court, vide it’s order dated 06.03.2024, in the case of M/s Polyspin Private Limited Vs. State of Tamil Nadu & others (W.P. No. 6041 of 2024), on a prima facie case being made out, has stayed further proceedings pursuant to the appellate order issued by the GST appellate authority. The department had confirmed the demand against the petitioner by classifying the paper bags under the residual entry at Serial No. 453 of Schedule III of the Rate Notification (Notification No. 1/2017 – Central Tax (Rate), dated 28.06.2017, as amended), making them taxable at the rate of 18%, whereas the petitioner had classified the paper bags under chapter heading 4819 30 000, making them taxable at the rate of 12%.
The petitioner argued as under:-
Article 279A of the Constitution of India provides that the GST Council shall make recommendations to the Union and the States on ‘the rates including floor rates with bands of goods and services tax’.
A committee of officers of the Central Government and the State Governments (i.e., the ‘Fitment Committee’) was constituted, which met on 18-19 April 2017, 4-6 May 2017 and 10 May 2017 inter alia in order to fit the goods in the bands of rate of GST approved by the GST Council in its 3rd Meeting and on the basis of guidelines prescribed by the GST Council in its 4th Meeting. Resultantly, the Fitment Committee put together a GST Rate Schedule for Goods containing five (5) Annexures being Annexure I, II, III, IV and V giving a list of goods recommended to be kept at GST Rates of Nil, 5%, 12%, 18% and 28%. These Annexures were circulated by the Fitment Committee before the GST Council for its consideration in Agenda Notes of 14th Council Meeting to be held on 18-19 May 2017 and are contained in Volume 3 of the said Agenda Notes as Agenda Item No.9.
