Geomembranes Made from HDPE Strips Fall Under HSN 5911: AAAR Rejects Department’s Appeal

The respondent, Shree Ambica Geotex Pvt. Ltd manufactures and sells textile products and articles like Geomembranes. Additionally, they also manufacture intermediate goods like Tapes/Strips. However, the whole quantity is used for producing final products, viz. Geomembranes.

The respondent company had sought an advance ruling on the following question:

“Whether the product, namely, geomembranes merits classification under heading 5911, sub-heading 59111000 or sub heading 59119090 as textile products, coated, covered or laminated with plastic, used for technical purposes?”

The Gujarat Authority for Advance Ruling (AAR) ruled that geomembranes is classified under HSN 5911, with tariff item 59111000.

However, the appellant-tax department (Deputy Commissioner, Central GST) argued that the previous AAR ruling, including the Advance Ruling in M/s Ananta Synthetic Innovations and other cases, had classified Geomembranes for waterproof lining fabrics under HSN 3926.

Therefore, the appellant department filed an appeal before the Gujarat Appellate Authority for Advance Ruling (GAAAR) to challenge the ruling of the Gujarat AAR.

The Gujarat AAAR rejected the department’s appeal, observing that the Gujarat High Court, in the case of M/s Ananta Synthetic Innovations, had already held that geomembranes are classifiable under 59 and not under Chapter 39.

As a result, the AAAR upheld the Gujarat High Court’s ruling holding that geomembranes made from HDPE strips are classified under HSN 5911.