18% GST on Non-Woven Bags manufactured through Non-Woven fabric: AAR [Read Order]

The Gujarat Authority of Advance Ruling (AAR) ruled that 18% GST on Non-Woven Bags manufactured through Non-Woven fabric.

The Applicant, M/s Girivariya Non-Woven Fabrics Pvt is engaged in manufacturing of Non-Woven Bags through the intermediate product, i.e. Non-Woven fabrics manufactured from Fiber grade polypropylene granules by adopting the Spun Bond technology.

The applicant submitted that in the Spun Bond technology, polypropylene granules are fed to the hopper and passed through the extruder at a certain temperature. The melted material after filtering passed through the spinning unit to obtain a continuous single filament. The said filaments are then subject to lying on the continuous web and under control pressure thermal bonding. The resultant product is Non-Woven fabric which is called Polypropylene Non-Woven fabrics.

The applicant submitted that prior to introduction of the GST Act, the Polypropylene Non-Woven bags were being classified under Heading No. 6305 being products manufactured through non-woven fabrics classified under Heading No.5603.

The applicant sought the advance ruling on the issue Whether the product Non-Woven Bags manufactured through the intermediate product, Non-Woven Fabrics classifiable under Heading No. 5603 are properly classifiable under Heading No.6305 or under Heading No. 3923.

The coram consisting of Sanjay Saxena and Mohit Aggarwal ruled that the Non-Woven Bags manufactured through the intermediate product, i.e. Non-Woven fabric manufactured from Fiber grade polypropylene granules by adopting the Spun Bond technology, merits classification under HS code 3923.

The AAR stated that the rates of GST applicable on products during different periods as discussed namely  18% GST for the period between July 1, 2017, to September 30, 2019; 12% GST for the period between October 1, 2019, to December 30, 2019, and 18% GST from January 1, 2020, till date.

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