In re Texbond Non-wovens (GST AAR Puducherry)
Whether PP non-woven bags will be classified under HSN Code 63059000 or HSN 39232990?
The item ‘Polypropylene Non-woven Bags’ has to be classified under HSN code 39232990 and not to be classified under HSN code 63059000 and to be taxed at 18% not at 5%.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, PUDUHERRY
Subject: GST Act,2017-Advance Ruling U/s 98 on Classification and rate of GST on PP Non-woven bags. We would like to make it clear that the provisions of both the Central Goods and Services Tax Act, 2017 (“CGST Act”) and the Puducherry Goods and Services Tax Act, 2017 (“PGST Act”) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the PGST Act.
2. M/s. TEXBOND NONWOVENS, No.A 27-30, PIPDIC Electronic Park, Thirubuvanai, Puducherry- 605 107 (hereinafter referred to as the ‘Applicant’) are engaged in the manufacture of various products falling under Chapter 56 & 63 of HSN and registered under GST having GSTIN 34AAEFT3643C1ZJ has filed an application on 23.05.2019 under section 97 of the CGST Act and the PGST Act, read with rule 104 of the Central Goods and Services Tax Rules, 2017 & Puducherry Goods and Services Tax Rules, 2017 in ‘Form GST ARA-01’ seeking an Advance Ruling on ‘classification of PP Non-Woven Bags’. The applicant enclosed copy of challan as proof of payment of fee of Rs.5,000/- for SGST vide CIN No.SBIN19053400009675 dated 23.05.2019with the application and subsequently also made a payment of Rs.5,000/- for CGST vide CIN No. HDFC20093400001009, dated 04.09.2020. The applicant submitted that the question raised in the application has neither been decided by nor is pending before any authority under any provisions of the CGST Act/ PGST Act. No objection to the admission of the application has been raised by the jurisdictional officer concerned. Hence, the application is admitted.The applicant has sought whether PP Non-woven bags (made Raw materials – PP granules (HSN 39021000) which are used for manufacture of Non-woven fabrics (HSN 5603)which are further used for manufacture of PP Non-woven bags by stitching) classifiable under HSN 63059000 or HSN 39232990.
3. The applicant inter-alia submitted that they are manufacturing PP Non-woven bags, made from Non-woven fabrics of HSN 5603 and classifying the same as bags made of technical textiles under HS code 63053900 /63059000 and paying GST @ 5%. That the raw materials used are PP Granule of HS code 39021000.
4. The personal hearing was fixed on 23.10 2019. Mrs. Julie Ernestine Marie. T, Admin &Commercial manager appeared for personal hearing and represented on behalf of the applicant. She reiterated the earlier submission made in the application and requested time for submitting the technical write up for the manufacturing of non-woven package material.
5. The applicant furnished the technical write up regarding the product and process as detailed below:
5.1. In their technical write up the applicant inter-alia has stated that they are manufacturers of Polypropylene Spunbonded Non-woven fabrics (manmade textiles) falling under HSN 5603 (Non-woven, whether or not impregnated, coated, covered or laminated) and its Articles – Garments under HSN 6210 (garments, made up of fabrics of heading 5602, 5603, 5903, 5906 or 5907) and bags under HSN 6305 (sacks and bags, of a kind used for the packing of goods-man-made textile materials) and that some basic characteristics of Spunbond Non-woven fabric are,-
