TMI Blog2021 (1) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 Applicable rate of GST on product - Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT:- The rates of GST leviable on above product were changed from time to time, as below: (a) Period 01.07.2017 to 30.09.2019 - rate of CGST and SGST @ 9% each, totalling to 18%. (b) Period 01.10.2017 to 31.12.2019 - rate of CGST and SGST @ 6% each, totalling to 12%. (c) Period 01.01.2020 to till date - rate of CGST and SGST @ 9% each, totalling to 18%. - GUJ/GAAR/R/84/2020 - - - Dated:- 17-9-2020 - SANJAY SAXENA AND MOHIT AGRAWAL MEMBER Present for the applicant : Shri Paresh Sheth, Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifiable 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old 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 abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of total GST was 18% (9% CGST + 9% SGST) up to 30.09.2019, as reproduced herein below: Schedule III- 9% Sl.No. Chapter/Heading/Sub Heading/ Tariff Item Description of the Goods 108. 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics (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.01/2017C.T. (Rate) dated 28.06.2017, which is as below: Schedule II- 6% Sl.No. Chapter/Heading/Sub Heading/ Tariff Item Description of the Goods 80AA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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