2020(09)LCX0175(AAR)

AAR-GUJARAT

M/s Rotex Fabric pvt.ltd

decided on 17/09/2020

GUJARAT AUTHORITY FOR ADVANCE RULING
GOODS AND SERVICES TAX
A/5, RAJYA KAR BHAVAN, ASHRAM ROAD,
AHMEDABAD – 380 009.

ADVANCE RULING NO. GUJ/GAAR/R/84/2020
(IN APPLICATION NO. Advance Ruling/SGST&CGST/2019/AR/54)

Date: 17.09.2020

BRIEF FACTS

The applicant M/s. Rotex Fabric pvt.ltd. located at Survey No.275/1/P, Plot No-22/23, Shapar Main Road, Shapar Veraval, Rajkot-360024 are manufacturers and suppliers of Non-woven bags through the intermediate product Non-woven fabrics manufactured from Fiber grade poly propylene granules by adopting the Spun Bond technology. The applicant has stated that in this technology, poly propylene granules are fed to the hopper and passed through extruder at certain temperature and the melted material after filtering passed through the spinning unit to obtain a continuous single filament and the said filaments are then subject to lying on the continous web and under control pressure thermal bonding which results in the manufacture of the product i.e. Non-woven fabric which is called polypropylene non-woven bags.

2. The applicant has submitted that prior to the introduction of Goods and Service Tax Act, the polypropylene non-woven bags were being classified under Heading No.6305 being the product manufactured through non-woven fabric classifiable under Heading No.5603; that prior to the introduction of Goods and Services Act, the classification of Polypropylene non-woven bags was in question before the authority under Section 94 of the Kerala Value Added Tax Act, 2003 in the case of M/s. Malabar Treads, Manjeri and the authority after considering the Heading No.5603 as appearing in the Schedule to the Central Excise Tariff concluded that the said product would appropriately be classifiable under HSN Code 6305.33.00 of the Customs Tariff Act which corresponds to Entry No.174(7)(1) of List A of the third Schedule to the KVAT Act, 2003(copy of order submitted); that after the introduction of Goods and Services Act, 2017 also, the issue of classification was under consideration by various manufacturers and representations were being made; that one of the manufacturers namely M/s. Karam Green Bags had approached DKTE CENTER OF EXCELLENCE IN NON WOVENS (Government Department) and the Director of the said organization has clarified that the Polypropylene non-Woven fabrics are classifiable under Heading No.5603 and these Polypropylene non-woven fabrics are basically textile materials and not plastic(copy of clarification dated 30.08.2017 submitted).

3. The applicant has further submitted that Madurai District Non-woven bag and Cotton bag manufacturer Association had approached the Commissioner of Central GST and Central Excise, Madurai vide letter dated 22.12.2017 and had requested to clarify the classification of non-woven bags etc. and the office of the Commissioner vide letter dated 01.01.2018 issued from File F.No.IV/16/84/2017-Tech(GST) has clarified that non-woven bags are classifiable under Heading No.63059000 and are eligible for exemption under Notification No.01/2017-Central Tax(Rate)(copy of letter submitted); that one of the manufacturers M/s. U.S. Polytech of Howrah had also approached the Honorable Advance Ruling Authority for Classification of Polypropylene Non Woven Bags and the said authority was of the view that the said product is classifiable under Heading 39.23; that however on appeal to the Appellate Authority for Advance Ruling, the Honorable Appellate Authorities have reversed such orders and have settled the law that the Polypropylene non­woven bags would appropriately be classifiable under Heading No.6305 and have stated that the Advance Ruling Authority had erred in holding that PP non-woven bags were classifiable under Heading No.39.23 (copy of Order No.02/WBAAAR/Appeal/2019 dated 13.05.2019 is submitted); that the Honorable Tax Research Unit of Ministry of Finance, Department of Revenue, New Delhi vide Circular No.80/54/2018-GST issued clarification regarding GST rates and classification, wherein one of the products was Polypropylene woven and non-woven bags and PP woven and non-woven bags laminated with BOPP and the Learned Authority after considering the meaning of the word ‘Plastic’ come to the conclusion that the products would be classifiable under HS Code 3923 and would attract 18% GST(copy of said Circular submitted).

4. The applicant has also submitted that the Polypropylene non-woven bags are being manufactured out of non-woven fabrics which are admittedly classifiable under Heading No.5603 i.e. as Textile Article and therefore the product manufactured out of the said material will have to be considered as textile article and classifiable under Heading No.63.05; that in view of the Rules of Interpretation, Heading 6305.3300 being specific heading would prevail over the General Heading of 3923; that the Honorable Advance Ruling Authority as referred above as well as the Honorable Appellate Advance Ruling Authority have settled the law and have confirmed the classification of polypropylene non-woven bags under Heading No.6305.3300 and therefore the same would be binding; that the decision of Honorable Appellate Authority for Advance Ruling is 13.05.2019, i.e. after the clarification issued by TRU section of Ministry of Finance, and therefore the same would prevail over the clarification; that the Director of DKTE Center of Excellence in non-wovens have also clarified beyond doubt that the polypropylene non-woven fabric is textile material and not plastic and therefore the product manufactured out of such material could never be classified as plastic material; that the same issue had come up before the Honorable Supreme Court in the case of Porritts and Spencers(Asia) Limited v/s State of Haryana reported in 1983(13)ELT 1607 and the Honorable Supreme Court after considering the relevant facts has settled the law that the word ‘Textile’ would also cover the fabric manufactured through any material(copy of decision submitted). The applicant has put forward the following question seeking Advance Ruling on the same:

1. “Whether the product Non-woven bags manufactured through the intermediate product Non-woven fabric classifiable under Heading No.5603 are properly classifiable under Heading No.6305 or under Heading No.3923?

2. Whether the product Non-woven bags would be eligible for exemption under Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 as amended?”

DISCUSSION & FINDINGS:

5. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Paresh Sheth, Advocate at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant.

6. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 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 similar provisions of the GGST Act.

7. Based on the submission of the applicant as well as the arguments/discussions made by the representative of the applicant during the course of personal hearing, we find that the main issue to be decided is whether the product PP Non-woven bags manufactured through the intermediate product Non-woven fabric classifiable under Heading No.5603 are properly classifiable under Heading No.6305 or under Heading No.3923.

8. We observe that the applicant is engaged in the manufacture of Non woven Bags through the intermediate product Non Woven Fabrics manufactured from Fibre grade poly propylene granules by adopting the Spun Bond technology. In this technology polypropylene granules are fed to the hopper and passed through extruder at certain temperature. The melted material after filtering is passed through the spinning unit to obtain a continuous single filament. The said filaments are then subject to lying on continuous web and under control pressure thermal bonding. The resultant product is non Woven fabrics which is called Polypropylene Non Woven Fabric. The issue for decision before us is the appropriate Rate of Tax and HSN code for Nonwoven Bags manufactured by the applicant.

9. We will first discuss the appropriate classification of the goods viz. Non Woven Polypropylene Bag The applicant claims that their product is classifiable under CTH 6305. The relevant chapter Note, headings, HSN Explanatory Notes are examined as under :

6305 SACKS AND BAGS, OF A KIND USED FOR THE PACKING OF GOODS

6305 10 - Of jute or of other textile bast fibres of heading 5303 :

6305 10 10 — Jute bagging for raw cotton

6305 10 20 — Jute corn (grains) sacks

6305 10 30 — Jute hessian bags

6305 10 40 — Jute sacking bags

6305 10 50 — Jute wool sacks

6305 10 60 — Plastic coated or paper cum polythene lined jute bags and sacks

6305 10 70 — Paper laminated hessian jute

6305 10 80 — Jute soil savers

6305 10 90 — Other

6305 20 00 – Of cotton

– Of man-made textile materials :

6305 32 00 — Flexible intermediate bulk containers

6305 33 00 — Other, of polyethylene or polypropylene strip or the like

6305 39 00 — Other

6305 90 00 – Of other textile materials

10. “Explanatory notes to HSN: This heading covers textile sacks and bags of a kind normally used for the packing of goods for transport, storage or sale. These articles, which vary in size and shape, include in particular flexible intermediate bulk containers, coal, grain, flour, potato, coffee or similar sacks, mail bags, and small bags of the kind used for sending samples of merchandise by post. The heading also includes such articles as tea sachets.

Packing cloths which, after use as bale wrappings, are roughly or loosely stitched together at the edges, but which do not constitute finished or unfinished sacks or bags, are excluded (heading 63.07).”

11. We find the competing heading for the product is CTH 3923. For ease of reference, the relevant chapter notes, the tariff entry and the HSN Explanatory note is given below :

CHAPTER 39

Plastics and articles thereof

NOTES :

(1) Throughout this Schedule, the expression “plastics” means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under 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 of the external influence.

Throughout this Schedule any reference to “plastics” also includes vulcanised fibre. The expression, however, does not apply to materials regarded as textile materials of Section XI.

(2) This Chapter does not cover :

(a) lubricating preparations of heading 2710 or 3403;

(b) waxes of heading 2712 or 3404;

(p) goods of Section XI (textiles and textile articles);

3923 ARTICLES FOR THE CONVEYANCE OR PACKING OF GOODS, OF PLASTICS; STOPPERS, LIDS, CAPS AND OTHER CLOSURES, OF PLASTICS

3923 10 – Boxes, cases, crates and similar articles:

3923 10 10 — Plastic containers for audio or video cassettes, cassette tapes, floppy disk and similar articles

3923 10 20— Watch-box, jewellery box and similar containers of plastics

3923 10 30 — Insulated ware

3923 10 40 — Packing for accommodating connectors

3923 10 90 — Other kg. 10% –

Sacks and bags (including cones):

3923 21 00 — Of polymers of ethylene

3923 29 — Of other plastics:

3923 29 10 — Of poly (vinyl chloride)

3923 29 90— Other

3923 30 – Carboys, bottles, flasks and similar articles:

3923 30 10 — Insulated ware

3923 30 90 — Other

3923 40 00 – Spools, cops, bobbins and similar supports

3923 50 – Stoppers, lids, caps and other closures :

3923 50 10— Caps and closures for bottles

3923 50 90— Other

3923 90 – Other :

3923 90 10— Insulated ware

3923 90 20— Aseptic bags

3923 90 90— Other

Explanatory notes to HSN: This heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products. The articles covered include :

(a) Containers such as boxes, cases, crates, sacks and bags (including cones and refuse sacks), casks, cans, carboys, bottles and flasks.

The heading also covers :

(i) Cups without handles having the character of containers used for the packing or conveyance of certain foodstuffs, whether or not they have a secondary use as tableware or toilet articles;

(ii) Bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape.

(b) Spools, cops, bobbins and similar supports, including video or audio cassettes without magnetic tape.

(c) Stoppers, lids, caps and other closures.

The heading excludes, inter alia, household articles such as dustbins, and cups which are used as tableware or toilet articles and do not have the character of containers for the packing or conveyance of goods, whether or not sometimes used for such purposes (heading 39.24), containers of heading 42.02 and flexible intermediate bulk containers of heading 63.05.

12. We find that the issue of classification of PP/HDPE Bags or sacks, made of HDPE tapes and fabrics, has been dealt with at length by the Hon’ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. v. UOI [1990 (50) E.L.T. 201 (M.P.)]. While deciding the identical issue, the Hon’ble High Court has observed :

“In the Textiles Committee Act, 1963 (Act 41 of 63) the word “fibre” has been defined in Section 2(a) as under :-

“fibre” means man-made fibre including regenerated cellulose rayon, nylon and the like.”

“Textiles” has been defined in Section 2(g) as under :- “Textiles” means any fabric or cloth, or yarn or garment or any other articles made wholly or in part of –

(i) Cotton; or

(ii) Wool; or

(iii) Silk; or

(iv) Artificial silk or other fibre, and includes fibre”.

Therefore, according to the above definition, any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles. The definition of ‘fibre’ includes the regenerated cellulose, rayon, nylon and the like. Nowhere in the aforesaid definition of ‘fibre’ or ‘textiles’ plastic has been mentioned as a commodity to be included in the definition of ‘fibre’ or ‘textiles’. Now in Shree Radhe Industries case (supra) and the Shellya Industries case (supra) irrespective of the entries in the tariff as prevailing then, it has been held that the HDPE sacks are articles made of plastic; they are made of high density polyethylene which is a plastic raw material and it has further been held that they are not man-made, filament yarn but are articles of plastic. The circular of the Central Board of Direct Taxes dated 20-1-1985 also clearly says that the Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff No. 15A(i), even if at the intermediate stage articles classifiable under Item No. 15A(ii) if any tariff item emerges, the said product would be considered to have been produced out of plastic material falling under Tariff Item No. 15A(i) and, therefore, the HDPE woven sacks should be considered as articles of plastic.”

Having so discussed and defined the words ‘Man-made Fibre’ and ‘Textile’ for the purpose of arriving at the appropriate classification of HDPE Woven Bags/Sacks, the Hon’ble High Court has opined; ‘………….. the process of manufacture of HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the department clearly go to show that HDPE bags are the bags woven by plastic strips and they, therefore, are goods of plastic and the material used for weaving those bags being the strips of plastic made from plastic granules, the strips of plastic used for weaving aforesaid HDPE woven sacks has to be classified as an item under Entry 3920 of Chapter 39 and not under Entry 5406 of Chapter 54. Accordingly, entries of finished goods have also to be made under proper Chapter of the Tariff Act treating them as the finished goods made of plastic strips.

In the result we hold that HDPE strips or tapes fall under the Heading 3920, Sub­heading 3920.32 of the Central Excise Tariff Act and not under heading 5406, sub­heading 5406.90. Similarly HDPE Sacks fall into Heading 3923, Sub-heading 3923.90….’

13. In the above decision, Hon’ble High Court of Madhya Pradesh has discussed what is textile according to Section 2(g) of Textiles Committee Act, 1963 (Act 41 of 63) and according to the above definition, any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles, Nowhere in the aforesaid definition of ‘fibre’ or ‘textiles’ plastic has been mentioned as a commodity to be included in the definition of ‘fibre’ or ‘textiles’. Therefore it can be concluded that intermediate Fabrics manufactured from Fibre grade poly propylene granules cannot be considered as “textile” material. Chapter No. 63 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) only covers textile sacks and bags of a kind normally used for the packing of goods whereas applicant’s goods i.e. Non Woven Bags is not manufactured from textile material as discussed above. Hence applicant’s claim that their product covers under Chapter Heading No. 6305 of Custom Tariff Act, 1975(51 of 1975) is not correct. The applicant’s product Non Woven Bags is manufactured from Fibre grade poly propylene granules which falls under the definition of plastic material and therefore their goods Non Woven Bags is classifiable under Heading No. 3923 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975).

14. The applicant has referred to Advance Ruling in the case of M/s. U. S. Polytech { Order No. 31/WBAAR/2018-19, dated 8-1-2019} reported in 2019 (21) GSTL 76 (AAR-GST), wherein the West Bengal Authority for Advance Ruling held that the Non Woven Polypropylene Bag is classifiable under Heading No. 39.23. However, the Appellate Authority of Advance Ruling {Order No. 02/WBAAAR/Appeal/2019 dated 13.05.2019} has reversed the said order and Ruled that the Polypropylene Non Woven Bag would appropriately be classifiable under heading No. 6305. The said Ruling is not applicable in the applicant’s case because as per Section 103 of the CGST Act, any Advance Ruling is binding on the Applicant, who has sought it and on the concerned officer or the jurisdictional officer in respect of the Applicant. Accordingly, AAAR’s Ruling as cited above can’t be relied upon in the present case of the Applicant.

15. Further, applicant has relied upon the Hon’ble Supreme Court’s decision in the case of M/s. PORRITTS & SPENCER (ASIA) LTD Vs. State of Haryana reported in ELT 1983 (13) ELT 1607 (S.C.) stating that the Hon’ble Supreme Court has settled the law that the word “Textile” would also cover the fabric manufactured through any material. The applicant has failed to understand the intention of the Hon’ble Supreme Court and therefore relied upon the specific last line of the Paragraph of the order. Whereas, in order to understand the meaning of said Paragraph, it is necessary to read the order thoroughly and comprehensively. The Hon’ble Supreme Court, in the said Order has defined what is textile and the relevant part of the order is reproduced as under for better understanding:

6. There can, therefore, be no doubt that the word `textiles’ in Item 30 of Schedule `B’ must be interpreted according to its popular sense, meaning “that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it”. There we are in complete agreement with the Judges who held in favour of the Revenue and against the assessee. But the question is : What result does the application of this test yield? Are `dryer felts’ not `textiles’ within the ordinary accepted meaning of that word? The word `textiles’ is derived from the Latin `texere’ which means `to weave’ and it means any woven fabric. When yarn, whether cotton, silk, woollen, rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being is a `textile’ and it is known as such. It may be cotton textile, silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile. The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may be any other process or technique. There is such phenomenal advance in science and technology, so wondrous is the variety of fabrics manufactured from materials hitherto unknown or unthought of and so many are the new techniques invented for making fabric out of yarn that it would be most unwise to confine the weaving process to the warp and woof pattern. Whatever be the mode of weaving employed, woven fabric would be `textiles’. What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls; it may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear on its character as a textile. It may be used for making wearing apparel, or it may be used as a covering or bedsheet or it may be used as tapestry or upholstery or as duster for cleaning or as towel for drying the body. A textile may have diverse uses and it is not the use which determines its character as textile. It is, therefore, no argument against the assessee that `dryer felts’ are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit. That cannot militate against `dryer felts’ falling within the category of `textiles’, if otherwise they satisfy the description of `textiles’.

16. From the simple and plain reading of the above para, it is very much clear that Hon’ble Supreme Court of India has stated that textile is woven fabric, which is emerged by weaving of yarn of cotton, silk, rayon or nylon and similar type of material. The said textile may be used for making apparel, bed sheet or tapestry or upholstery or as towel. Therefore, fabric made of other than the yarn of cotton, silk, rayon or nylon and similar type of material is not a textile. The word used in the sentence is “similar type of material” and the meaning of said word can only be drawn in reference of the words used before the above word. The fabric made of Fiber grade Poly Propylene granules is not a “similar type of material” of cotton, silk, rayon or nylon. Hence fabric made of Fiber grade Poly Propylene granules cannot be considered as textile. Hence, ratio of above case law is not squarely applicable to the present case.

17. Reference is also invited to CBIC (TRU) Circular No.80/54/2018-GST issued from F. No. 354/432/2018-TRU dated 31st December, 2018, clarifying GST rates & classification in respect of various goods. Para 7 of subject Circular has clarified that the goods viz. polypropylene woven and non-woven bags are classifiable under HS code 3923 and attracts GST @ 18%, the relevant portion is extracted as below:

“Applicability of GST on supply of Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP :

7.1 Representations have been received seeking the classification and GST rates on Polypropylene Woven and Non-Woven Bags and Polypropylene Woven and Non-Woven Bags laminated with BOPP.

7.2 As per the explanatory notes to the HSN to HS code 39.23, the heading

covers all articles of plastics commonly used for the packing or conveyance of all kinds of products and includes boxes, crates, cases, sacks and bags.

7.3 Further as per the Chapter note to Chapter 39, the expression “plastics” means those materials of headings 39.01 to 39.14 which are or have been capable, either at the moment of polymerization or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticizer) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence.

7.4 Thus it is clarified that Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP would be classified as plastic bags under HS code 3923 and would attract 18% GST.

7.5 Non-laminated woven bags would be classified as per their constituting materials”.

From the above clarification, it is crystal clear that Polypropylene Woven and Non-Woven Bags would be classified as plastic bags under HS code 3923 and would attract 18% GST.

18. In view of the above, we conclude that Non-Woven Bags manufactured through the intermediate product, i.e. Non-Woven fabric manufactured from Fiber grade poly propylene granules by adopting the Spun Bond technology, merits classification under HS code 3923, as also clarified by the CBIC in the Board Circular No.80/54/2018-GST issued from F. No. 354/432/2018-TRU dated 31st December, 2018 and discussed herein above.

19. Having decided the classification, the next issue to be decided is of the applicable rate of GST on poly propylene non-woven bags. In order to determine the tax liability on said goods, we are required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, as amended, containing the headings, sub-headings as well as the rates of Central Tax GST applicable to various goods, which are covered under 6 schedules as under:

(i) 5 per cent. in respect of goods specified in Schedule I,

(ii) 6 per cent. in respect of goods specified in Schedule II,

(iii) 9 per cent. in respect of goods specified in Schedule III,

(iv) 14 per cent. in respect of goods specified in Schedule IV,

(v) 5 per cent. in respect of goods specified in Schedule V, and

(vi) 125 per cent. in respect of goods specified in Schedule VI.

Further, Explanations (iii) and (iv) of the said Notification read as under:

(iii) “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

20. The rates of GST leviable on above product were changed from time to time, as discussed below:

(A) From 01.07.2017 to 30.09.2019:

The goods of Chapter heading 3923 are covered under Sr. No. 108 of Schedule-III of Notification No.01/2017-CT (Rate) dated 28.06.2017, up to 30.09.2019 and therefore, the applicable rate of total GST was 18% (9% CGST + 9% SGST) up to 30.09.2019, as reproduced herein below:

Schedule III- 9%

(B) From 01.10.2019 to 30.12.2019:

The Notification No.14/2019-C.T.(Rate) dated 30.09.2019, amended the Notification No. 01/2017-C.T. (Rate) dated 28.06.2017, w. e. f. 01.10.2019, to the effect that in Schedule III, against S. No. 108, in column (3), after the words “other closures, of plastics”, the brackets, words, letters and figures “(except the items covered in Sl. No. 80AA in Schedule II])”, was inserted and further a new entry 80AA was inserted in the Schedule-II of the Notification No.01/2017-C.T. (Rate) dated 28.06.2017, which is as below:

Schedule II- 6%

Therefore, the applicable rate of total GST was 12% (6% CGST + 6% SGST) on the product in hand from 01.10.2019 to 31.12.2019.

(C) From 01.01.2020 to till date:

The Notification No. 27/2019-C.T. (Rate) dated 30.12.2019 (effective from 01.01.2020) further amended the Notification No.01/2017-C.T. (Rate) dated 28.06.2017 wherein the entry at 80AA in the Schedule-II-6% of the Notification was omitted and a new entry 163B was inserted in Schedule III-9% of the Notification, which reads as under:

Schedule III-9%

Therefore, effective from 01.01.2020, the rate of product in hand is 18% (9% CGST and 9% SGST).

21. In the light of the above, we rule as under :

RULING

Question.1 Whether the product Non Woven Bags manufactured through the intermediate product Non Woven fabric classifiable under Heading No. 5603 are properly classifiable under Heading No. 6305 or under Heading No. 3923?

Ans. The product Non Woven Bags manufactured through the intermediate product Non Woven plastic material manufactured from Fibre grade poly propylene granules merit classification under Heading No. 3923. The rates of

GST applicable on said products during different periods, as discussed herein above, are as below:

Question.2. Whether the product Non Woven Bags would be eligible for exemption under Notification No. 01/2017-CT (Rate) and 01/2017-I.T. (Rate) dated 28.06.2017 as amended?

Ans. Negative in view of the above discussion.

(SANJAY SAXENA)
MEMBER

(MOHIT AGRAWAL)
MEMBER

Place: Ahmedabad
Date: 17.09.2020

Equivalent .