The Authority for Advance Ruling ( AAR ), Tamil Nadu ruled that the Non-woven PP Rice Bags / Sacs 6% CGST as per Sl.No.8OAA of Schedule II of Notification dated 28.06.2OI7 as amended and 6% SGST as per S.No. 80AA of Schedule-Il dated 29.06.2017 as amended and effective O1.O1.2O2O.

They are manufactures of sacks and bags of Non-woven Rice Bag. They purchase non-woven fabric rolls made of 100% polypropylene fibre which are classified under HSN Code 5603 and convert the same into sheets by cutting printing and then manmade stitched into a bag.

Such non-weaved Rice Bags are mainly used for packing rice and food products of 5 Kg, 10Kg, 2OKg, and 25Kg. They have stated that this product falls under head HSN Code 6305 3300 and liable to be taxed 5% if the sale value falls below Rs.1000/- and if the value is more than Rs. 1O0O/- it is liable to be taxed at l2%  under the GST Act.

The applicant was heard in person on 28.08.2019. They submitted photographs of the manufacturing process and produced samples of the raw material used. The raw material is PP Non-woven fabric which is bought in rolls in white colour and then printing the designs given by their customers who are rice millers are done.

It is stitched into bags with top open of 5/lO/I5l2O Kg Size with a fixed dimension. The customer will fill the bag with rice and close the top with stitching. The applicant undertook to submit a sale invoice for each size.

They further stated that all the bags are below Rs. 7, OOO/- per piece and should be taxed at CGST 2.5% and SGST 2.5%. They also submitted a report of a textile research association stating that the raw material is non-woven fabric and not plastics.

Ponraj, Proprietor, M/s PPP Associates, is registered under the GST Act with GSTIN 33BYOPP469OLIZO. The applicant has sought Advance Ruling on the following question that whether the category of a product “Non-woven PP Rice Bags / Sacs” falls under the classification of HSN 63053300 and its application of rate of tax is at 5%.

The coram comprising of Additional Commissioner Manasa Gangotri Kata and Joint Commissioner, Kurinji Selvaan V.S pronounced the ruling based on an application filed by V. Ponraj, Proprietor, M/s PPP Associates.

The authority observed the applicable rate for the bag of value not exceeding Rs.10O0 per piece is 2.5% CGST as per Sl.No. 224 of schedule I of Notification dated 28.06.2017 and 2.5% SGST as per S.No. 224 of Schedule-I dated 29.06.2017 up to 3O.O9.2O19.

The authority further observed that thereupon up to 37.12.2019, the applicable rate is 6% CGST as per Sl.No.8OAA of Schedule II of Notification dated 28.06.2OI7 as amended and 6% SGST as per S.No. 80AA of Schedule-Il dated 29.06.2017 as amended and effective O1.O1.2O2O.

The authority further said that the applicable rate is 9% CGST as per Sl.No. 1638 of Schedule III of Notification dated 28.06.2017 as amended by Notification dated 30.12.2OI9 and 9% SGST as per S.No. 1638 of Schedule-Ill as amended.

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