PVC Carpet Mat taxable at 18% GST: AAR Maharashtra

In re National Plastic Industries Limited (Authority For Advance Ruling)

The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”‘ by NATIONAL PLASTIC INDUSTRIES LIMITED, the applicant, seeking an advance ruling in respect of the following question :

To seek the classification of the PVC floor mat and the applicable rate of GST on the same.

The product  claimed to be a floor mat. As can be seen, the product is made from PVC yarn which is impregnated with liquid PVC. PVC is polyvinyl chloride). The Harmonized System of Nomenclature Explanatory (1-ISN) Notes to Chapter 39 (General Notes) say that PVC is a polymer. The HSN – General Notes to Chapter 39 say that “In general, this Chapter covers substances called polymers and semi-manufactures and articles thereof, provided they are not excluded by Note 2 to the Chapter”. This Note 2 to the Chapter 39 says‑

2. This Chapter does not cover :

(p) goods of section NI (textiles and textile articles);

The HSN Notes to Chapter 39 have defined the word “plastics” as –

1. Throughout the Nomenclature the expression “plastics” means the materials of headings 39.01 to 39.14 which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed tinder external influence (usually heat and pressure. if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal by the external influence.

Throughout the Nomenclature any reference to “plastics” also includes vulcanised fibre. The espression, however, does not apply to materials regarded as textile materials of^–Section XI.

The applicant has laid claim to the Customs Tariff Heading (CTH) 5705 as being licable to the impugned product. Chapter 57 falls in Section XI of the scheme of the Customs Tariff. Section XI is about “TEXTILES AND TEXTILE ARTICLES” and Chapter 57 is about “Carpets and other textile floor coverings”. With the understanding that the impugned product is composed only of PVC monofilament yarn and liquid PVC, we look at the HSN Notes to Section XI which say thus –

Notes.

1.- This Section does not cover :

Oil Woven, knitted or crocheted fabrics. felts or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof of Chapter 39;

PVC Falls in Chapter 39, more specifically Heading 39.04. The impugned product is non­woven and is impregnated with liquid PVC. We have seen above that the Chapter 39 covers substances called polymers and semi-manufactures and articles thereof, provided they are not excluded by Note 2 to the Chapter. The Note 2 reproduced above excludes goods of Section XI and Section XI excludes nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of Chapter 39. The impugned product is not only impregnated but also coated with PVC, which is a plastics of Chapter 39. And this is also admitted by the applicant when it is submitted that – the web ‘formed in Stage I is impregnated with a lamination of clear coat of liquid PVC and is  further made to fall over the liquid PVC layer  on a conveyer belt. The present product is made from PVC only and there should be no doubt whatsoever that the same would fall in Chapter 39 which covers PVC, a polymer and articles thereof.

l having seen thus, there arises no occasion for us to discuss the Heading 5705 which is claimed as being applicable. The case laws being buttressed in respect of the applicability of the Heading 5705 also need no discussion as to their applicability or otherwise. However, we would like to observe herein that we are not at all disagreeable to the point that there are man-made textiles but the same are not required to be referred to here in view of the impugned product being clearly classifiable under Chapter 39 as per discussions held hereinabove.

Now as can be seen that the applicant’s query is in respect of the classification of the PVC floor mat and the applicable rate of GST on the same, we would now move on to decide the rate on the impugned product. There is no specific entry in the Schedule for goods exempted from GST as found in the Notification no.2/2017-Central/State Tax (Rate) which would cover the impugned product. In the Schedule for goods taxable to GST at various rates as found in the Notification no.1/2017-Central/State Tax (Rate), the following entries may be looked at –

The rate in respect of all the entries is the same, 9% each of CGST and SGST. Heading 3924 covers household articles. The impugned product is a carpet mat which is used at all locations and not only in households. In respect of Heading 39.26, the HSN General Notes say that it is a residual heading which covers articles, not elsewhere specified or included, of plastics or of other materials of headings 39.01 to 39.14. However, we find that Heading 39.18 covers the following products as under –

‘Note 9. For the purposes of heading 3918. the expression “wall or ceiling coverings of plastics” applies to products in rolls, of a width not less than 45 cm, suitable for wall or ceiling decoration, consisting of plastics fixed permanentl^y on a backing of any material other than paper, the layer of plastics (on the face side) being grained, embossed. coloured. design printed or otherwise decorated.

From the details of the Tariff Headings referred above, we find that the Heading 3918 covers floor coverings of plastics, whether or not self-adhesive, in rolls or in the form of tiles. We also find that the applicant informs that the manufactured product is a product of running length which is then cut into size as given/specified by the customer. The product is described as being a PVC Carpet Mat and therefore, it is clear that the impugned product would fall in the entry no. 104A of Schedule III, thereby attracting tax at the rate of 18% (9% each of CGST and SGST).

ORDER

For reasons as discussed in the body of the order, the question is answered thus –

Q. To seek the classification of the PVC floor mat and the applicable rate of GST on the same.

A. PVC floor mat, as described herein above, would fall in the Customs Tariff Heading 3918 and the applicable rate of GST thereon would be 18% (9% each of CGST and SGST’).