12% GST on Manufacturing of ‘Fusible Interlining cloth for Cotton Fabrics’: AAR [Read Order]

12% GST on Manufacturing of ‘Fusible Interlining cloth for Cotton Fabrics’: AAR [Read Order]

GST - Manufacturing - Fusible Interlining cloth - Cotton Fabrics - AAR - taxscan

The Gujarat Authority of Advance Ruling (AAR) ruled that 12% GST on the manufacturing of ‘Fusible Interlining cloth for cotton fabrics’.

The applicant, M/s. Ashima Dyecot pvt. ltd. is engaged in the manufacture and supply of fabrics and garments.

The applicant has sought the advance ruling in respect of classification of the fusible interlining cloth for cotton fabrics which is manufactured by the applicant. The applicant has stated that they are classifying the said product under the HSN Code 5903 attracting a 12% rate of Tax.

However, the competitors of the Applicant are classifying the said product under Chapter 52/55 attracting a 5% rate of duty depending upon the primary content of the fabric resulting in business loss to the applicant.

The AAR found that it does not cover laminated fabrics or fabrics coated with plastics. Hence, it can be safely concluded that ‘Fusible Interlining cloth for cotton fabrics’ will not be covered under Chapter 52 of the First Schedule to the Customs Tariff Act, 1975.

The coram consisting of Sanjay Saxena and Mohit Agarwal held that The product ‘Fusible Interlining cloth for cotton fabrics’ manufactured by the applicant M/s Ashima Dyecot Private Limited, Ahmedabad is correctly classifiable under Heading 5903 of Chapter 59 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

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