TMI Blog2020 (3) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. Applicable rate of tax - HELD THAT:- The applicable rate for the bag of value not exceeding ₹ 1000 per piece is 2.5% CGST as per SI.No. 224 of schedule I of Notification No 1/2017-C.T.(Rate) dated 28.06.2017 and 2.5% SGST as per S.No. 224 of Schedule-I of G.O.(Ms.) No. 62 dated 29.06.2017 No. II(2)/CTR/532(d-4)/2017 upto 30.09.2019 and thereupon upto 31.12.2019, the applicable rate is 6% CGST as per SI.No. 80AA of Schedule II of Notification no. 01/2017-C.T(Rate) dated 28.06.2017 as amended and 6% SGST as per S.No. 80AA of Schedule-II of G.O. (Ms.) No. 62 dated 29.06.2017 as amended and effective 01.01.2020, the applicable rate is 9% CGST as per SI.No. 163B of Schedule III of Notification no. 01/2017-C.T.(Rate) date 28.06.2017 as amended by Notification no.27/2019-C.T.(Rate) dated 30.12.2019 and 9% SGST as per S.No. 163B of Schedule-Ill of G.O. (M.S.) No. 62 dated 29.06.2017 as amended. - TN/04/AAR/2020 - - - Dated:- 31-1-2020 - MS. MANASA GANGOTRI KATA, I.R.S., AND THIRU KURINJI SELVAAN V.S., M.SC., (AGRI.), M.B.A., MEMBER, Note: Any appeal against this Advance Ruling order shall lies before the Tamil Nadu State Appellate Authority for Advance Rulings, Chennai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all the bags are below ₹ 1,000/- per piece and should be taxed at CGST 2.5% and SGST 2.5% as per S.No. 224 of Schedule I of Notification 1/2017. They also submitted a report of a textile research association stating that the raw material is non-woven fabric and not plastics. 3.2 The applicant furnished sample Tax Invoice for purchase of Nonwoven Fabric Roll and sample sale invoice for sale of Nonwoven Rice Bag of 5Kg, 10 Kg, 25 Kg. 4.1 The Jurisdiction Central Tax Officer submitted the written comments. In the written comments, the following are stated:- The applicant are purchasing their raw material Viz., Non-Woven Fabric Rolls) HSN:5603] made of 100% Polypropylene Fibre usually in white colour, at the GST rate of CGST@6% and SGST @6% for manufacture of Non-woven Fabric Bags. They are cutting the fabric rolls in to pieces of desired sizes, printing on it based on various designs. Logos required by their customers and stitching into Bags. They are selling the non-woven Fabric Bags [HSN:6305] mainly to the rice suppliers. The bags of 5 Kg, 10 Kg, 20 Kg and 25 Kg capacity are sold at the sale value not exceeding ₹ 1,000/- per piece and GST is paid at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted with desired designs and cut into shape before being stiched into bags. Such bags are used to package to bulk items , here specifically Rice. Non woven Fabric are covered CTH 5603 as seen in the HSN Explanatory Notes 56.03 - Nonwovens, whether or not impregnated, coated, covered or laminated. - Of man-made filaments : 5603.11 - - Weighing not more than 25 g/m2 5603.12 - - Weighing more than 25 g/m2 but not more than 70 g/m2 5603.13 - - Weighing more than 70 g/m2 but not more than 150 g/m2 5603.14 - - Weighing more than 150 g/m2 - Other : 5603.91 - - Weighing not more than 25 g/m2 5603.92 - - Weighing more than 25 g/m2 but not more than 70 g/m2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Other 6305.90 - Of other textile materials 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). 5.4 We find that CBIC vide its Circular No. 80/54/2018-GST dt. 31.12.2018, under para 7, 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 Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: .................................................................................... - 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 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: ........................................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant. The applicant manufactures non-woven fabric bags from the fabric roles classified under 5603 and is used mainly for packing rice and food products for storage and sale. Thus applying the Explanation of HSN to Heading 6305, given above, the product is classifiable under Chapter Heading 6305 3300. 6.1 Having decided the classification, the next issue to be decided is the applicable rate. The applicant has stated that their product non-woven fabric bag falls below ₹ 1000/- per piece. The description of the goods stood mentioned at S.No. 224 of Schedule I of Notification No. l/2017-C.T.(Rate) dated 28.06.2017 upto 30.09.2019 and therefore, the applicable rate of CGST is 2.5% and SGST is 2.5% upto 30.09.2019. Notification No. 14/2019-C.T.(Rate) dated 30.09.2019, amended the Notification No. 01/2017-C.T.Rate dated 28.06.2017 wherein the entry at S.No. 224 of Schedule I was amended to the effect that the said entry do not cover the goods of 6305 32 00, 6305 33 00, 6309 and further a new entry 80AA inserted in the Schedule-II of the Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, which is as below: 80AA 3923 or 6305 ..... 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