The Authority for Advance Ruling (AAR), Gujarat has held that Next Gen Geo Textile called ‘StrataTex HSR®’, an innovative product proposed to be manufactured by the applicant shall attract 10% GST as the same shall be classified under Tariff Item 591 19032 of Customs Tariff Act, 1975 subject to obtaining BIS Certification.
The applicant, Strata Geosystems India Pvt Ltd, had sought an advance ruling on the classification of an innovative product called ‘StrataTex HSR®’ which can be used as the base material in the construction industry in various civil engineering applications, including roads, pavements, container yards, and embankments.
The applicant stated that the product is a fabric, manufactured by the process of wrap knitting of high-grade polyester yarn with special high tenacity & low creep property.
The applicant also clarified that the fabric is not subjected to processes like bleaching and dyeing, the polyester yarn used for the manufacture of fabric is not coloured and the fabric is also not subjected to processes like coating, covering or lamination.
The applicant added that it would be manufactured in width & length exceeding 30 cm & as per customers’ requirements in roll forms and would not be subjected to any further cutting after manufacturing in the hands of the applicant.
The applicant, represented by Anand Nainawati, Ishan Bhatt, J Ramakrishnan and Chandrashekhar K had sought clarification on whether the product should be classified under Tariff Item (TI) No. 60059000 or TI 59119032 of the Customs Tariff Act, 1975.
During the personal hearing, the applicant confirmed that they have applied for BIS certification, which is currently pending, and stated that their product aligns with the BIS standards of IS 16391 and IS 16392, further supporting its classification as a geotextile.
The Authority consisting of Milind Kavatkar (SGST Member) and Amit Kumar Mishra (CGST Member), after a thorough examination of the manufacturing process, product characteristics, and its intended use, has ruled that ‘StrataTex HSR®’ falls under Tariff Item 59119032 attracting 10% GST. This specific entry applies to geotextiles conforming to IS 16391 and IS 16392, as per the amendments made to the Customs Tariff Act, effective from May 1, 2022.
The authority emphasized the significance of the specific entry under Tariff Item 59119032, which covers knitted or woven geotechnical textiles specified in note 8 of Chapter 59 of the Customs Tariff Act, 1975 stating the well-established Rule of Interpretation that a specific entry will have precedence over general entry.
The AAR clarified that the applicant’s product must obtain BIS certification as a prerequisite for falling within the ambit of Tariff Item 59119032 attracting 10% GST, as per the amendment in the Customs Tariff Act.
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