In re Strata Geosystems India Pvt Ltd (GST AAR Gujarat)
Whether the proposed product ‘Geotextile-Stratex’ would be classifiable under Tariff Item (TI) No. 60059000 or under TI 59119032 of the Customs Tariff Act, 1975?
AAR held that based on the information submitted by the applicant, the proposed product StrataTex HSR® would be classifiable under Tariff Item (TI) No. 59119032 of the Customs Tariff Act, 1975 however subject to the condition that they have been granted BIS certification in terms of amendment in Customs Tariff Act, 1975 as per 3rd Schedule (Sr. No. 43(vi)) read with section 98 of Finance Act, 2022.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT
Strata Geosystems India Pvt Ltd., Survey No. 284, Off Bhilad Sanjan Road, Next to Sutlej Textiles, Village Daheli, Umbergaon, Valsad, Gujarat-396105 [for short-`applicant’] is registered under GST and their GSTIN is 24AAICS3717K1Z7.
2. The applicant is engaged in the supply of various products on which they are discharging GST. The applicant proposes to manufacture and supply a new product under the category of ‘Go technical textile’ which they intent to sell under the brand name `Strata Tex HSR®’ [for short -`said product’]. The applicant further states that the commercial production is yet to start; that they have only started with the trial production for testing and sampling purpose.
3. As per the applicant, the said product is a fabric, manufactured by the process of wrap knitting of high grade polyester yarn with special high tenacity & low creep property; that the said fabric is not subjected to processes like bleac dyeing; that polyester yarn used for the manufacture of said fabric is not c that the fabric is also not subjected to process like coating, covering, impregnation or lamination; that it would be manufactured in width exceeding 30 cms & length as per customers requirements in roll forms & would not be subjected to any further cutting after manufacture in the hands of the applicant.
4. The production process of the said product is explained via flow chart at para 7 of Annexure A to the application.
5. In para 8 of the application, the applicant has stated as follows:
“8. The proposed product `StrataTex HSR®‘ is a geo-technical textile which confirms to IS standard 16391/16392 issued by BIS. The proposed product “StrateTex HSR®. would be used as a base material during construction of roads, pavements, container yards and embankments. The said product would provide reinforcement for embankments on soft soil and act as load transfer platform for piled embankments. “
6. The applicant has currently declared the classification of the said product under 6005 90 00 of CTA ’75. In the Union Budget for the FY 2022-23, amendments were made to the first schedule of the CETA, wef 5.2022, wherein tariff item 5911 90 32 was inserted with the description `Geotextile conforming to IS 16391, IS 16392′. Section XI covers ‘Textile & Textile Articles’. Chapter 59 of the CTA covers ‘Textile products & articles, for technical uses, specified in note 8 to this chapter’. Further sub-heading 59 11 90 of the CTA covers ‘knitted or woven Geo technical textile’. Thus, the applicant is of the view that any goods of the nature of `geotextile’ confirming to IS 16391, IS 16392 would be classifiable under TI 5911 90 32 subject to note 8 of Chapter 59 of CTA. Chapter 60, on the other hand, covers ‘knotted or crocheted fabrics’ and heading 60.05 covers ‘wrap knit fabrics (including those made on gallon knitting machines), other than those of heading 6001 to 6004’.
7. In view of the foregoing, the applicant has filed this application, seeking advance ruling on the below mentioned questions viz
1. Whether the proposed product “Geotextile-Stratex” would be classifiable under Tariff Item (TI) No. 60059000 or under TI 59119032 of the Customs Tariff Act, 1975?
8. Personal hearing was granted on 23.3.2023 wherein Shri Anand Nainawati and Shri Ishan Bhatt, both Advocates, Shri J Ramakrishnan and Shri Chandrashekhar K., appeared on behalf of the applicant and reiterated the facts as stated in the application. During the course of the personal hearing it was submitted that they manufacture the said product out of high end polyester yarn; that they have applied for BIS certification. They also submitted a sample of the product during the course of personal hearing.
Discussion and findings
9. At the outset, we would like to state that the provisions of both the CGST Act and the GGST 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 GGST Act.
10. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant’s submission/interpretation of law in respect of question on which the advance ruling is sought.
11. Before adverting to the submissions made by the applicant, we would like to reproduce the relevant provisions, competing tariff entries, etc for ease of reference:
Note 8 to Chapter 59 of CTA , 1975
8. Heading 5911 applies to the, following goods, which do not .fall in any other heading of Section XL
(a) textile products in the piece, cut to length or simply cut to rectangular (including square) shape (other than those having the character of the products of headings 5908 to 5910), the following only:
(i) textile fabrics, felt and felt-lined woven .fabrics, coated, covered or laminated with rubber, leather or other material, of a kind used .for card clothing, and similar fabrics of a kind used .for other technical purposes, including narrow fabrics made of velvet impregnated with rubber, for covering weaving spindles (weaving beams);
(ii) bolting cloth;
(iii) .filtering or straining cloth of a kind used in oil presses or the like, of textile material or of human hair
(iv) flat woven textile fabrics with multiple warp or weft, whether or not felted, impregnated or coated, of a kind used in machinery or for other technical purposes;
(v) textile fabrics reinforced with metal, of a kind used for technical purposes;
(vi) cords, braids and the like, whether or not coated, impregnated or reinforced with metal, of a kind used in industry as packing or lubricating materials;
(b) textile articles (other than those of headings 5908 to 5910) of a kind used for technical purposes [for example, textile fabrics and .felts. endless or fitted linking devices, of a kind used in paper making or similar machines (for e for pulp or asbestos-cement), gaskets, washers, polishing discs machinery parts].
12. We find that the applicant in his application has further stated as follows:
