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2019 (5) TMI 1037

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..... Central Excise Tariff was aligned with Customs Tariff after the enactment of the Central Excise Tariff Act 1985 which are in alignment with the HSN. Further, in the case at hand the process of manufacture of the Propylene Mat is similar to that considered in the Circular. Therefore we hold that the ‘Polypropylene Mats’ supplied by the applicant is classifiable under CTH 46019900 - It is pertinent to note that the classification of the ‘Propylene Mats’ under CTH 4601 is in line with the classification in the Drawback Schedule in respect of ‘Polypropylene Mats’. Applicable rate of tax - HELD THAT:- The product in hand is classified under CTH 4601 - CTH 4601 covers plaits and similar products, whether or not being finished articles but made of vegetable materials such as of Bamboo, of rattan, of Other Vegetable materials. In the case at hand, the mats are made of Polypropylene, which are definitely not of vegetable materials and therefore are not covered under SI.No. 103 of Schedule - II above. As the Polypropylene mats are not specified elsewhere in the rate schedules, the applicable rate CGST @ 9% as per Sl.No. 453 of Schedule - III of Notificati .....

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..... hat is the applicable tax rate for the Polypropylene Mats ? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted copy of Challan evidencing payment of application fees of ₹ 5000/- each under Sub-rule (1) of Rule 104 of CGST Rules 2017 and also SGST Rules 2017. 2. The Applicant is engaged in the business of trading of Polypropylene Mats on wholesale and retail basis. They are buying from various manufacturers and selling the Polypropylene Mat. The HSN code for the mats given by the manufacturer is 460101. They are invoicing the outward supply mentioning the description as Polypropylene Mats / Mattings under the HSN Code 460101. 2.1 The Applicant has stated that the HSN Code for the Polypropylene Mats as given by the manufacturer is 460101 and it is also in the GST Tariff Ready Reckoner. Further, as per the Circular No. 4/2018 - Customs in F.No. 609/12/2018 - DBK dated 24/01/2018, issued by the Central Board of Customs & Excise, Department of Revenue, Ministry of Finance, the Polypropylene Mats are classified under tariff item 460101. 2.2 They have further stated that the tax officials are stating that HSN Code 3902 is applicable for P .....

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..... the mats as given by the Manufacturer is 460101 Chapter Notes to Chapter 46 of the HS Nomenclature 2017 Edition of the World Customs Organisation exactly describes the Polypropylene Mat which is also called as Satranj or Polypropylene Straw Mat. Circular in F.N0. 93/24/87-CX3 dated 16.06.1987 issued by the Ministry of Finance clarified the HSN Code for Polypropylene Mat is 4601 The Judgment of the Customs, Excise and Service Tax Tribunal in the case of Supreme Industries Ltd. Vs. Commissioner of Central Excise on 27th May 2004 = 2004 (5) TMI 378 - CESTAT, NEW DELHI decided that the correct HSN Code is 4601 for Polypropylene mats As per Circular No. 4/2018-Customs, F.No. 609/ 12/2018-DBK dated 24.01.2018, issued by the Central Board of Customs & Excise, the Polypropylene mats are classified under tariff item 460101 They are not manufacturers and they are buying from various manufacturers and selling the Mat. The manufacturers are classifying under 4601. 3.2 The Applicant filed copy of tax invoices of inward supply indicating PP MAT under HSN 4601; outward supply as PP STRAW MAT . PP SCRAP MAT under 4601; photo copy of samples ; manufacturing process of Polypropylene Mats furnish .....

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..... hich 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; (c) separate chemically defined organic compounds (Chapter 29); (d) heparin or its salts (heading 3001); (e) solutions (other than collodions) consisting of any of the products specified in headings 3901 to 3913 in volatile organic solvents when the weight of the solvent exceeds 50% of the weight of the solution (heading 3208); stamping foils of heading 3212; (f) organic surface-active agents or preparation of headings 3402; (g) run gums of ester gums (heading 3806); (h) prepared additives for mineral oils (including gasoline) or for oth .....

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..... ter 46 of HSN states that, GENERAL In addition to articles of loofah, this Chapter covers semi-manufactured products (heading 46.01) and certain articles (headings 46.01 and 46.02) made by interlacing, weaving or by similar methods of assembling unspun materials, particularly ; (1) Straw, osier or willow, bamboos, rushes, rattans, reeds, chipwood (i.e., wood in thin strips), drawn wood, strips of other vegetable material (for example, strips of bark, narrow leaves and raffia or other strips obtained from broad leaves such as those of banana plants or palm trees), provided they are in a state or form suitable for plaiting, interlacing or similar processes. (2) Unspun natural textile fibres. (3) Monofilament and strip and the like of plastics of Chapter 39 (but not monofilament of which no cross-sectional dimension exceeds 1 mm nor strip or the like of an apparent width not exceeding 5 mm, of man-made textile materials, of Chapter 54). (4) Strips of paper (including paper covered with plastics). (5) Certain materials consisting of a textile eore (unspun fibres, braid, etc.), wound or covered with strips of plasties, or thickly coated with plastics, so that the product no longer has t .....

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..... or vice versa, provided that the sole function of the textile yam (apart from incidentally introducing colour effects) is to bind the plaiting substances. Similarly, in the case of the goods made by binding parallel strands of plaiting materials, the hinder may be a plaiting material, a textile yam or some other material. Similar processes of binding together or weaving are also used to obtain goods in sheet form from the plaits or similar products of plaiting materials described in Part (A) above. The goods of this group, which may be reinforced or backed or lined with woven textile fabric or with paper, include : (1) Semi-manufactured products such as raffia, rattan and similar fabrics; and the finer products made in the piece in the form of lapping or strips for use in millinery, upholstery, etc. (2) Certain finished articles, for example: (a) Mats and matting (floor coverings, etc.), including in particular the so-called Chinese (or Indian) mats and matting (whether rectangular or in other shapes), made by weaving or binding together parallel strands of plaiting materials (or plaits or similar products of plaiting materials) with other plaiting materials, twine, cord, etc. (b) .....

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..... help of polyester or cotton yarn as weft material. 3. Articles of plastics remained classified under Heading No. 39.22 of the CET during the period prior to 10-2-1987 (starting from 28-2-1986). From 18-2-1987, articles of plastics stand classified under five different headings i.e. Heading Nos. 39.22, 39.23, 39.24, 39.25 and 39.26 of CET. A perusal of the tariff description of all the above-mentioned headings does not indicate that such headings cover even the woven plastic materials like plastic mat/ mating (Satranji). The relevant Section and Chapter Notes of CET as well as the HSN do not give such an indication. Therefore, it was felt necessary to examine whether the product in question could merit classification under Heading No. 46.01 of the CET. 4. Heading No. 46.01 of the CET covers, manufactures of straw, of esparto or of other plaiting materials; basket ware and wickerwork NOTES : 1. In this Chapter, the expression plaiting materials means materials in a state or form suitable for plaiting, interlacing or similar processes; it includes straw, osier or willow, bamboos, rattan, rushes, reeds, strips of wood, strips of other vegetable material for example, strips of bark, nar .....

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..... nder Schedule Il covers CTH 4601 which is reproduced as follows: Schedule-Il -6% S.No. Chapter Heading/ Sub-heading / Tariff item Description of goods 103. 4601 Plaits and similar products of plaiting materials, whether or not assembled into strips; plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands or woven, in sheet form, whether or not being finished articles (for example, mats matting, screens) of vegetables materials such as of Bamboo, of rattan, of Other Vegetable materials The above entry covers plaits and similar products, whether or not being finished articles but made of vegetable materials such as of Bamboo, of rattan, of Other Vegetable materials. In the case at hand, the mats are made of Polypropylene, which are definitely not of vegetable materials and therefore are not covered under SI.No. 103 of Schedule - II above. As the Polypropylene mats are not specified elsewhere in the rate schedules, the applicable rate CGST @ 9% as per Sl.No. 453 of Schedule - III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 and SGST @ 9% as per Sl.No. 453 of Schedule -III of Notification No. vide G.O. (Ms) No. 62 dated 29.06 .....

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