2019 (1) TMI 1487 - AAR - GST

Classification of goods - Polypropylene Leno Bags - rate of tax - whether classified under Tariff sub-Heading No. 6305 33 00 of the GST Tariff or under Tariff sub-Heading No. 3923? - Held that - TRU clarification under Circular No. 80/54/2018-GST issued under F. No. 354/ 432/2018-TRU dated 31/12/2018 in Para 7 sub-Para 7.4 clarifies 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 - HSN 3923 covers articles of the conveyance or packing of goods of plastics; etc. Sub- Heading 39232990 is applicable for sacks and bags of plastics which are neither polymers of ethylene nor of poly-vinyl chloride and are subject to 18% GST. Ruling - Poly Propylene Leno Bags are to be classified as plastic bags under HSN 3923 and would attract 18% GST.

Summary

The West Bengal Authority for Advance Ruling (AAR) addressed the classification and applicable GST rate for Polypropylene (PP) Leno Bags manufactured by the Applicant. The Applicant contended that these bags, made from woven polypropylene strips not exceeding 5 mm in width and without any coating or lamination, should be classified under Tariff sub-Heading 6305 33 00 (sacks and bags of man-made textile materials) attracting 5% GST, citing prior West Bengal AAR rulings (Orders No. 09/WBAAR/2018-19 and 16/WBAAR/2018-19).However, the AAR referred to the Central Board of Indirect Taxes and Customs (CBIC) TRU Circular No. 80/54/2018-GST dated 31/12/2018, Para 7.4, which clarifies that polypropylene woven and non-woven bags, including those laminated with BOPP, are classified as plastic bags under HS Code 3923. Specifically, sub-heading 39232990 covers sacks and bags of plastics (excluding polymers of ethylene or PVC) and attracts 18% GST.Accordingly, the AAR held: **"'Poly Propylene Leno Bags' are to be classified as plastic bags under HSN 3923 and would attract 18% GST."**This ruling is valid under Section 103 of the GST Act unless declared void under Section 104(1).