PVC Raincoats Classified as Plastic Articles Not Textiles, Attract 18% GST: AAR [Read Order]
AAR ruled that PVC raincoats are plastic articles under HSN 3926.20, taxable at 18% GST, and not textile garments
The West Bengal Authority for Advance Ruling (AAR) held that raincoats made of polyvinyl chloride (PVC) sheeting are to be classified as plastic articles and not as textile garments. Such raincoats will attract Goods and Services Tax (GST) at the rate of 18%.
The application was filed by the Waterproof Products Manufacturers & Traders Welfare Association, a Kolkata-based trade body representing manufacturers and traders of waterproof products.
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The association sought clarity on whether PVC raincoats should be taxed under Chapter 62 of the Customs Tariff Act as “articles of apparel and clothing accessories, not knitted or crocheted” which would attract GST at 5% or 12% depending on the sale value or under Chapter 39, covering “plastics and articles thereof,” which attracts GST at 18%.
The applicant's counsel argued that since PVC is derived from man-made fibres, raincoats manufactured from PVC sheets should fall under HSN 6201 or 6202, which specifically include raincoats attracting a lower tax rate. They also relied on judicial precedents and rulings from other states supporting the classification of PVC raincoats as garments.
The bench comprising Mr. Susanta Kumar Maity (Joint Commissioner, State Tax) and Mr. Joyjit Banik (Senior Joint Commissioner, CGST & CX) observed that PVC sheets are produced by polymerisation and calendaring, without generating fibres, filaments or yarns. So, PVC sheeting cannot be considered a textile material.
The authority explained that as per the Harmonised System of Nomenclature (HSN) Explanatory Notes, articles such as aprons, bibs and raincoats made from plastic sheeting are specifically covered under tariff item 3926.20.
The tribunal held that PVC raincoats fall under HSN 3926.20 as “articles of apparel and clothing accessories of plastics.” Accordingly, such raincoats are taxable at 18% (9% CGST + 9% SGST) under Entry No. 111 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated June 28, 2017.
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