GST Breakthrough for Agro-Textiles Geo-Membrane Waterproof Liners Classified as Technical Fabric: AAR [Read Order]

The Maharashtra Authority for Advance Ruling (AAR) has classified Geo-Membrane Waterproof Liners, used primarily in agriculture for water conservation, as technical textiles under Chapter Heading 5911 10 00 of the GST tariff. This decision brings clarity to the tax treatment of these products, which were previously classified under a residual plastics category.

Hari Om Flexipack Industries, manufactures Geo-Membrane for Waterproof Lining-Type-II as per Indian Standard IS:153151:2015. These liners are essential for water retention in ponds, canals, and other agricultural storage systems. The company had sought an advance ruling to determine whether the product should be classified under Chapter 39 (plastics) or Chapter 59 (textiles). The AAR’s decision confirms that the product qualifies as a technical textile, aligning with its manufacturing process and end-use.

The manufacturing process involves four key stages. First, HDPE granules are extruded into tapes less than 5mm wide. These tapes are then woven into fabric, laminated with LDPE film for waterproofing, and finally cut and sealed to create the finished Geo-Membrane. The AAR noted that the woven fabric, derived from synthetic strips, meets the definition of a textile under the Customs Tariff Act. The ruling emphasized that the product’s technical use in water conservation further supports its classification under Chapter 59.

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The AAR rejected the jurisdictional officer’s argument that the product should be classified under Chapter 39 as an article of plastic. It referenced the Gujarat High Court’s Ananta Synthetics Innovations (2024) decision in a similar case, which held that Geo-Membranes woven from HDPE tapes are technical textiles, not plastics. The ruling also cited the Hon’ble Supreme Court’s earlier view that products with a specific classification should not be relegated to residual entries.

Key to the decision was the product’s compliance with Indian Standards for agro-textiles and its recognition as a technical textile by the Directorate General of Foreign Trade and the Ministry of Textiles. The AAR highlighted that Geo-Membranes are critical for advanced farming techniques like Biofloc technology, where they prevent water exchange and disease in aquaculture.

The bench, comprising D.P. Gojangunde and Priya Jadhav, concluded that the product’s technical functionality and textile-based manufacturing process justify its classification under Heading 5911. This ruling provides much-needed clarity for manufacturers and ensures consistent GST treatment for similar agro-textile products. In Conclusion the AAR has conclusively determined that 'Geo-Membrane for Waterproof Lining-Type-II' (as per IS:153151:2015) is appropriately classified under Tariff Item 5911 10 00 as a technical textile.

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