Classification of Bags/Sacks manufactured by the applicant.

PJ/Case Law/2018-2019/3528

Case: PIYUSH POLYTEX INDUSTRIES PVT. LTD.
Citation:Order No. 41/WBAAR/2018-19, dated 26-2-2019 in Case No. 43/2018
Issue: Classification of Bags/Sacks manufactured by the applicant.
Brief Facts: The applicant is a manufacturer of P.P. Nonwoven Fabric, Laminated Nonwoven Fabric, B.O.P.P. Pasted P.P. Nonwoven Fabric, P.P. Woven Fabric Pasted with Nonwoven Fabric and Nonwoven Bags/Sacks.
Appellant Contention: The Applicant discussed probable classification of different types of fabrics manufactured by them, but remains silent on the description & HSN of Bags/Sacks, on which the Ruling is sought. The Applicant only states that nonwoven bags/sacks are made of P.P. Nonwoven Fabric and it falls under Chapter Heading 63 of the GST Tariff. In this regard the Applicant relies upon AAR Order No. CT/5492/18-C3, dated 29-5-2018 passed by the Authority for Advance Ruling, Kerala.
Reasoning of Judgment: As per TRU clarification under Circular No. 80/54/2018-GST, Polypropylene woven and nonwoven 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. Moreover the non-laminated woven bags would be classified as per their constituting materials. Whether the bag/sack has handle or not, is of no consequence here.HS Code 3923 covers articles of the conveyance or packing of goods, of plastics; etc. Sub-heading 3923 29 90 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. Regarding Bags/Sacks made of Woven Fabric Pasted with Non-woven Fabric the Applicant has not stated the constituting materials of the fabric and hence, in the absence of any definite material mentioned for the fabric, the General Rules for the Interpretation of the First Schedule of the Customs Tariff, which has been adopted by GST, have to be referred to.
Comment:
Authority for Advance ruling has passed the following decision
(i)        Bags/Sacks (both with & without Handle) made of Laminated P.P. Non-woven Fabric is classifiable under sub-heading 3923 29 90,
(ii)       Bags/Sacks (both with & without Handle) made of B.O.P.P. Pasted P.P. Non-woven Fabric is classifiable under sub-heading 3923 29 90, and
(iii)      Bags/Sacks (both with & without Handle) made of Woven Fabric Pasted with Non-woven Fabric have to be classified as per the General Rules for the Interpretation of the First Schedule of the Customs Tariff.
Therefore on the basis of the above ruling classification of Bags/sacks manufactured shall fall under the Chapter heading No. 39 as relied on the TRU clarification issued under Circular No. 80/54/2018-GST.
Prepared by: Adit Gupta.

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PJ/Case Law/2018-2019/3528

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