The Authority of Advance Ruling ( AAR ) has ruled that, 12% Goods and Services Tax ( GST ) applicable on Geomembrane and is classified under HSN 5911. The AAR further ruled that the product comes under tariff item 59111000.
M/s Shree Ambica Geotex Pvt. Ltd, the applicant engaged in the business of manufacture and sale of textile products and articles like Geomembranes.
The applicant claims that Heading 5911 Sub Heading 59111000, which classifies textile products and articles for technical uses, is the most appropriate heading for categorization of the final products, namely Geomembranes, under the GST Tariff.
The bench ascertained that the contested goods, Geomembranes, have purely technical uses because they are used in aquaculture ponds along with Biofloc technology, a bacterial colony-based culture that is highly beneficial in preventing disease and creating an ecologically sustainable symbiotic system.
For Biofloc technology to be used, Geomembrane lined ponds are a must. Ponds lined with Geomembranes insulate the animals from diseases. The stocking destiny of animals in Geomembrane lined biofloc pond is twice the density of an ordinary unlined pond.
According to the applicant, items like the Geomembranes in question are textile goods, or textile articles, under the law established by the Gujarat High Court and Supreme Court, as well as when the term “textile” is used both technically and figuratively.
The authority observed the advance ruling highlighted by the applicant in case of M/s. EMMBI Industries Ltd, ruled by Daman, Diu & DNH AAR. It was ruled that the Laminated Coated Fabrics used for technical purpose and is specifically covered under scope of HSN Heading 59Ill000 – Product fit for using as pond liner laminated textiles products and correctly classified under HSN Code 5911
Thus, the technical uses of Geomembrane passed the test of Section note XI(l)(g) to Section X, Geomembrane satisfying the test of Chapter 59 Note 7(IXa), the authority of Milind Kavatkar and Amit Kumar Mishra viewed that the Geomembrane is a textile article.
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