QUESTION

Please clarify rate of GST after insertion of Entry Number 80AA in schedule II ( Rate of tax 6% ) in regards to HSN code number 3923 or 6305. As per our opinion rate would be 6% for woven and non woven bags and sacks of polythene or polypropylene i.e ( Polythene bags meant for packing of goods). But still in industry it is little confusion that the said rate of 6% is meant for textiles bags and sacks only and not for polythene bags . Please clarify the same.

ANSWER

Facts of the case:
Chapter heading 3923 covers "Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics".
Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods are items included in 3923.
It means Chapter Heading 3923 also covers items like Plastic bottles, containers etc.

Law Applicable:
 Notification No. 01/2017 Central Tax (Rate) Schedule II (12%)

Notification No. 01/2017 Central Tax (Rate) Schedule III (18%)

Conclusion:
1. With the insertion of entry no. 80AA vide Notification No. 14/2019-CGST (Rate) Dt.30-09-2019 uniform rate of 12% is applicable on Woven and non-woven bags and sacks of polyethylene. This entry not just specifies rate of 12% for textiles bags but also for bags of polythene or polypropylene.

2. So far as other items which are classifiable under Chapter Heading 3923 but not specified under Entry 80AA will attract GST under Entry No. 108 @ 18% because the new Entry 80AA is an independent entry and nowhere replacing old entry 108.

3. Entry No. 80AA is providing relief to the specified items covered under Chapter Heading 3923 as well as bags and sacks covered under Chapter Heading 6305.

The description specifies 3923 or 6305. The word 'OR' is providing separate relief to both the items.