TMI Blog2021 (7) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... vers other carpets and floor coverings. The Heading 5705 covers other carpets and other textile floor coverings whether or not made up and hence the product of the applicant does not fall under 5705. On the basis of the descriptions of the headings and the relevant chapter notes the product of the applicant is appropriately classifiable under Tariff Sub-Heading 5703 90 90 of the Customs Tariff Act. Rate of tax - HELD THAT:- The entry at SI No. 219 of Schedule I of the notification refers to the coir mats, mattings, floor coverings etc that are exclusively made up of coir fibres. In the instant case though the exposed surface of the mats / mattings / floor coverings manufactured and supplied by the applicant are of coir, it is backed by PVC and the manufacturing process involves use of technologically advanced machines for providing the backing using PVC and the PVC and the chemicals used for the backing has equal importance as that of coir and the PVC and the chemicals influence the value of the mats and mattings more than coir - Hence the products cannot be considered to fall, under the description of Coir mats, matting, floor covering mentioned in SI No. 219 of Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and (5) Coir Yarn. The estimated annual turnover on two shifts basis approximately is ₹ 12-18 Crores. Number of workers required for single shift is 10 and for two shifts are 20. The manufacturing operation is fully automated. Coir yarn and PVC mix is fed into the machine at one end and the finished product PVC tufted coir mat and matting automatically get rolled at the other end. The machinery is designed to produce 100 square meter per hour of PVC tufted coir mat and matting. Backing refers to a process where a very thin layer of material like rubber, latex etc is applied on the back side of coir mats or matting to make the mat or matting non slippery (reference constructional details of coir and coir product published by Coir Board). That is the backing process by itself does not result in the manufacture of coir mat or matting and is only an embellishment done on existing coir mat or mating. Thus the use of the term vinyl backed coir mats and matting to describe PVC tufted coir mats and matting is inappropriate, misleading and malafide. 4. The Applicant requested advance ruling on the following;- i. Notification No.34/2017 - Whether or not item number (A) (xii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mats and matting (reference - general rules for the interpretation of import tariff). The general rate of tax applicable to floor covering falling under Chapter 57 is 12%. The rate is reduced to 5% in respect of specified goods based on the recommendations of the Fitment Committee with justification for reduction from the standard rate of 12%. The recommendations were placed before the Council, discussed at the council and approved with such modification as the council deemed fit. No such recommendation is seemed to have been made or approved by the GST Council in respect of PVC Tufted Coir Mats and Matting. The PVC tufted coir mats and matting does not appear to be eligible for attracting low band tax rate of 5% as the said product does not appear to satisfy the principle approved by the GST Council in the 4th GCM for attracting low band of tax rate of 5%. The most specific description for PVC tufted coir mats and matting is not coir mats and matting and should be clearly specified as PVC tufted coir mats and matting. Hence, the term coir mats and mating do not describe, specify, represent, refer or apply to PVC tufted coir mats and matting. 6. CONTENTIONS OF THE JURISDICTION ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence as per the above, it is ascertained that the recommendations as mentioned above are for the cottage sector, whereas the manufacture of PVC Tufted Coir Mats uses sophisticated machinery and also involve high investments and also employ less man power. Therefore it is felt that the Fitment Committee and the GST Council has neither recommended nor approved the PVC Tufted Coir Mats to be considered in the low band tax rate of 5%. 7. PERSONAL HEARING: The applicant was granted opportunity for personal hearing on 05.01.2021. Shri. Sethumadhavan, Authorised Representative of the applicant appeared for personal hearing. He reiterated the contentions made in the application and also produced the sample of the product before the authority and requested to issue the ruling on the basis of the submissions made in the application. 8. DISCUSSION AND CONCLUSION: 8.1. The matter was examined in detail. Though the applicant has raised many questions the main issue to be decided is the classification and rate of goods and services tax of PVC Tufted Coir Mats and Matting manufactured and supplied by the applicant. 8.2. Carpets and other textile floor coverings fall under Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05. On the basis of the descriptions of the headings and the relevant chapter notes the product of the applicant is appropriately classifiable under Tariff Sub-Heading 5703 90 90 of the Customs Tariff Act. 8.5. Having come to the conclusion that the product of the applicant is rightly classifiable under Customs Tariff Sub - Heading 5703 90 90 the question that is to be answered is whether the product will attract GST at the rate of 5 % as per SI No. 219 of Schedule I or GST at the rate of 12 % as per SI No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. SI No: 219 of Schedule I of Notification No: 01/2017 CT (Rate) dated 28.06.2017 reads as follows; 219 5702, 5703, 5705 Coir mats, matting, floor covering and handloom durries. SI No. 144 of Schedule II of Notification No. 01/2017 CT (Rate) dated 28.06.2017 reads as follows; 144 5703 Carpets and other textile floor coverings, tufted, whether or not made up. On a combined reading of both the entries it is evident that the entry at SI No. 219 of Schedule I o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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