In a recent decision the Madras High Court ruled that the Aluminium Foil Container attracts GST 12%.
The petitioner, M/s. Veeram Natural Products, is a partnership firm engaged in the manufacture and supply of Aluminium Foil Container / Aluminium Foil in Roll Form and Plastic Articles. Prior to GST regime the said product was taxable under Central Excise Law and the product was classified Aluminium Foil Container under Chapter heading 7607 and levied duty at 12.5%.
Subsequent to the GST regime the petitioner classified under 7615 with 12% tax. But the revenue is claiming the product would come under 7607 with 18% tax. Hence there was a dispute in classification, whether it has to be classified are 7067 or 7615.
The Counsel who appeared for the petitioner submitted that under GST the taxable event to levy is “supply” of goods and service or both. Section 7 and 9 of GST Act, 2017 as amended govern the scope of supply and levy of tax. Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as amended prescribe rate of Central Tax to be levied on intra-state supply of specified goods with reference to its chapter headings. In GST regime for purpose of classification of specified goods Customs Tariff Act is being followed.
It was further contended that Iin the present case, since the Aluminium Foil Container is supplied by the petitioner unit are used for packing / serving the food stuff, the petitioner had classified under 7615. But the revenue has classified it under 7607 as “Aluminium foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm)”.
The petitioner submitted before the authorities that the issue is no longer res integra since the issued is decided by the Ahmedabad Tribunal in the case of Hindalco Industries Limited Vs. CCE. The Tribunal had relied on the opinion of the World Customs Organisation, which in turn had relied on the decision taken by the Harmonized System Committee and the decision of Supreme Court of South Africa, Tribunal which had classified the Aluminium Foil Containers as 7615.
A Single Bench of Justice S Srimathy observed that “And the issue raised by the petitioner is settled by the Hon’ble Supreme Court in favour of the petitioner and against revenue. Therefore, this Court is of the considered opinion that the product Aluminium Foil Container is classifiable under 7615 with GST 12%. Hence the impugned order is liable to be quashed and accordingly quashed.”
“However, the petitioner has already paid tax for the month of July 2017 to November 2017 at 18%, which is accumulated credit available to the petitioner. However, this Court is not inclined to decide the refund issue, since it has to be considered on various factors. The refund is left open between the parties and the same shall be adjudicated as per Provisions of Law” the Court noted.
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