TN AAR: 28% GST Applies to Plastic Rope Handles, Vent Plugs, and Split Tops and Bottoms

In an application to the Tamil Nadu bench of Authority for Advance Ruling (AAR), it was held that Plastic Rope Handle, Vent Plug, Split Top/Bottom Support categorized under the heading “8507” will be levied to tax at 28% GST.

The petitioner M/s V M Polymers, is in the business of manufacturing plastic articles used as parts of electric accumulators. The petitioner is registered under the GST Act. The applicant had furnished a copy of the challan on 07.10.2023 proofing the application fee payment of Rs. 5,000 under CGST and SGST Rules.

The petitioner sold the plastic articles including packing shim, bottom shim and bottom support, and top support. They provided the raw materials utilized in the procedure of manufacture. The plastic articles were categorized under Chapter 39 of the HS code issued by the World Customs Organisation.

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The problem was that if the products like the rope handle, vent plug and split top/ bottom support, were made from plastic counts under HS code classification heading “3926” OR “8057”?

What is the tax rate for the products cited under the GST legislation?

The applicant argued that a simple review of the classification clearly shows that heading “8507” pertains solely to electric accumulators, whereas heading 3926 specifically refers to plastic articles.

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It was claimed that goods should be categorized under more description compared to general description. It was furnished by the applicant that if the plastic articles made via them were considered to be counted under both “3926” and “8507”, for being accessories of electric accumulators then interpretation must be made following Rule 3.

According to Rule 2 and Rule 3, the plastic articles in question can be categorized under the heading “3926” and not “8507”. It was also asserted that plastic articles in question are used for transporting, lifting, packing, etc, and not the critical parts of electric accumulators.

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For the same matter, the quasi-judicial body including D. Jayapriya and A. Valli noted that the impugned articles are all incurred of plastic. Since they are used as parts of electric accumulators they must be counted under the heading “8507”.

For the goods categorized under the heading “8507”, especially under the sub-heading “8507 90” the subject tax rate shall be 14% CGST and 14% SGST. There is a reduced 9% CGST on Lithium-ion batteries.