In a recent application before the Tamil Nadu bench of Authority for Advance Ruling ( AAR ) it was ruled that Plastic Rope Handle, Vent Plug, Split Top/Bottom Support classified under the heading “8507” shall be taxed at a rate of GST amounting to 28%.
The Applicant M/s V M Polymers, engaged in the business of manufacturing plastic articles used as parts of electric accumulators. The applicant is registered under the GST Act. The applicant had submitted a copy of challan dated 07.10.2023 evidencing the payment of application fees of Rs. 5,000 under CGST and SGST Rules.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The plastic articles sold by the applicant included packing shim, bottom shim and bottom support and top support. They also submitted the raw materials used in the process of manufacture. The plastic articles were classified under the Chapter 39 of HS code issued by the World Customs Organisation.
The issue of the case was that whether the products such as rope handle, vent plug and split top/ bottom support, made from plastic falls under HS code classification heading “ 3926” OR “8057”? What is the rate of tax for the products mentioned under GST enactments?
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The applicant submitted that it was evident from the bare perusal of the classification that heading “8507” deals with electric accumulators only and heading 3926 deals specifically with articles of plastics.
It was also argued that goods must be classified under more description than a general description. The applicant submitted that if the plastic articles manufactured by them were deemed to fall under both “3926” and “8507”, for being accessories of electric accumulators then interpretation should be made in accordance with Rule 3.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
As per Rule 2 and Rule 3, the plastic articles in question can be classified under the heading “3926” and not “8507”. And it was also claimed that plastic articles in question are used for transporting, lifting, packing, etc and not the essential parts of electric accumulators.
In this case the quasi judicial body comprising D. Jayapriya and A. Valli observed that the impugned articles are all made of plastic, however as they are used as parts of electric accumulators they should be classified under the heading “8507”.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
It was also ruled that the goods classified under the heading “8507”, more particularly under sub heading “8507 90” the applicable tax rate would be 14% CGST and 14% SGST. The GST on Lithium-ion batteries were reduced to CGST at 9%.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
