Geo Membrane for Water Proof Lining attracts 12 % GST: Maharashtra AAR [Read Order]

In a significant ruling, the Maharashtra Authority for Advance Ruling (AAR) has classified Geo Membrane laminated HDPE woven polymer lining as a 'technical textile,' thereby reducing the applicable GST rate from 18% to 12%.

M/s. Lamifabs & Papers Private Limited, a manufacturer of Geo Membrane products had sought clarification on the correct HSN code and GST rate for its product, which is used as a pond liner for water retention in farming and aquaculture.

Previously, the product was classified under Chapter 39 of the GST tariff, attracting an 18% tax rate. The company argued that it should instead be classified under Chapter 59 as a technical textile, which carries a lower GST rate of 12%.

The AAR examined the manufacturing process of the Geo Membrane, which involves weaving HDPE tapes of less than 5mm width into fabric and then laminating it with plastic to make it impermeable. The authority noted that the product meets the specifications of the Indian Standard IS:15351:2015, which categorizes it as an agro-textile for technical use.

The AAR referred to the Gujarat High Court's decision in M/s. Ananta Synthetics Innovations(2024), where the court held that Geo Membrane is classifiable under Chapter 59 and not Chapter 39. This precedent reinforced the AAR's conclusion that the product is a textile fabric coated with plastic, designed for specific technical applications like water conservation. The ruling also cited the Directorate General of Foreign Trade's notification, which lists Geo Membrane as a technical textile, further supporting the classification.

The jurisdictional officer had initially opposed the reclassification, arguing that the product is primarily made of plastic and should remain under Chapter 39. However, the AAR overruled this contention, stating that the product's manufacturing process and end-use clearly align with the definition of technical textiles under Chapter 59.

The bench, comprising D.P. Gojamgunde and Priya Jadhav, upheld the applicant's interpretation and ruled that Geo Membrane for water-proof lining is correctly classified under HSN code 59111000, attracting a 12% GST rate.

In conclusion, the Maharashtra AAR ruled that Geo Membrane for Water Proof Lining falls under HSN code 59111000 and will attract a reduced GST rate of 12%.

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