AAR Clarifies GST Classification of Plastic Packing Boxes and Closures:

The West Bengal Authority for Advance Ruling (AAR) has held that PP Packing Boxes manufactured from plastic granules are classifiable under HSN 39231090, while lids, caps and covers supplied with such boxes fall under HSN 39235090 and attract GST at the rate of 18%.

The application was filed by Jai Hind Plastic, a manufacturer of PP Packing Boxes in West Bengal, seeking clarification regarding the correct HSN classification applicable to its products under the GST regime. The applicant submitted that the products were being manufactured using plastic granules through semi-automatic machinery and were currently being classified under HSN 392390 with GST charged at 18%.

The applicant further stated that the products are used for packing and conveyance of goods and are sometimes supplied along with lids, caps and closures. It sought confirmation regarding the precise tariff classification applicable to the products.

The Authority examined the invoices, product photographs and the relevant entries under Chapter 39 of the Customs Tariff Act, 1975 dealing with “Plastics and articles thereof”. It noted that the products were manufactured from polymers of propylene, which are covered under tariff heading 3902.

The AAR observed that PP Packing Boxes are clearly articles used for packing or conveyance of goods and therefore fall within tariff heading 3923 covering “Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics.”

“Being of the nature of boxes, cases, crates and similar articles, the containers manufactured by the applicant will come under sub heading 392310.”

The Authority further noted that the products did not fall under the specific tariff entries relating to plastic containers for cassettes, jewellery boxes, insulated ware or connector packing. Consequently, the PP Packing Boxes were held classifiable under residual tariff item 39231090.

With regard to lids, caps and closures supplied with the boxes, the AAR held that such products are separately classifiable under tariff item 39235090 covering “stoppers, lids, caps and other closures”. “The referred product is definitely an article for packing of goods and it is made of plastics.”

Referring to Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017, as amended, the Authority observed that products falling under heading 3923 attract GST at the rate of 18%, comprising 9% CGST and 9% SGST.

Thus, the West Bengal AAR ruled that PP Packing Boxes manufactured by the applicant are classifiable under HSN 39231090, while lids, caps and covers are classifiable under HSN 39235090.

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