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PVC Tufted Coir Mats and Mattings is taxable @12% GST

GST UPDATE: PVC Tufted Coir Mats and Mattings is taxable @12% GST
Recently AAR gave an important ruling dated 12th October 2019, regarding the classification of Supply of PVC tufted coir mats and mattings supplied by  the applicant in a case of Natural Fibre Tuft [2019] 110 taxmann.com 517 (AAR - KERALA) which is discussed  below:

Facts of the case
  • The applicant is a manufacturer and supplier of PVC tufted coir mats and mattings. The raw materials used for its manufacture are Coir yarn, PVC resin, Dolomite filler, Pigment, etc. and manufacturing activity is fully mechanized. The coir yarn stacked in creel stand is automatically fed into the machine where the yarn is cut into bits of required pile height and tufted over a uniform thickness of PVC by heating and chilling. The PVC matting in rolls are cut in the required sizes and obtained finished products PVC tufted coir mats.
Issue Involved
  • Classification and taxation of PVC Tufted Coir Mats and Matting was under question.
Ruling/observation
  • AAR observed that the coir, as well as PVC, chemicals, fillers etc, have equal importance. Hence PVC tufted coir mats and mattings cannot be classified as coir mats and mattings.
  • Notification No.34/2017- CT (Rate) covers only the commodities which are manufactured exclusively using coir fibre. Hence PVC Tufted Coir Mats and Matting PVC Tufted Coir Mats and Matting cannot be considered as the textile of coir and floor coverings covered under HSN 5702, 5703 and 5705.
  • As per Entry at Sl No. 144 of Schedule II of  Notification No. 01/2017 Central Tax (Rate), PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under the Customs Tariff Head 5703 90 90 and accordingly taxable at @ 12% GST. Hence the above supply made by applicant fall under heading 5703 90 90 and attract GST at the rate of 12%.
Please click here for Advance Ruling.

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