GST: Calcutta High Court Rules Polypropylene Leno Bags Are Plastic, Not Textile Products

The Calcutta High Court has denied Mega Flex Plastics Limited’s prayer to classify polypropylene leno bags as “textile products” under tariff heading 6305 33 00. 

The appellant (Mega Flex Plastics Limited) is a manufacturer of polypropylene leno bags. During the personal hearing, it claimed that the Leno bags manufactured by it are made out of polypropylene strips that resemble synthetic textile material and are commonly used for packing agricultural goods. Hence, the bags should be classified as “textile products” under tariff heading 6305 33 00 instead of “plastic products” under heading 3923 2900.

“The appellant declared polypropylene leno bags for export under the Tariff Heading 3923 2900 and marketed the same product in the domestic market under the Tariff Heading 6305 33 00 of the First Schedule to the Customs Tariff Act, 1975, as made applicable to GST by Notification No. 1/2017-Central Excise Rate dated June 28, 2017,” contended the appellant company.

The company further highlighted that this claim had already been accepted by the Authority for Advance Ruling (AAR) in the past, holding that these bags can be classified as textile products if the strips used were less than 5 mm wide and were not coated or laminated with plastic. However, later, the same ruling was overturned by the AAR.

When the case was taken before the high court, the bench comprising the Honourable Justice Debangsu Basak and Justice Md Shabbar Rashidi, after examining the manufacturing process, raw materials, and legal provisions related to textile classification, observed that the primary raw material used by the company was plastic granules and that the bags were widely known in the market as plastic woven sacks rather than textile sacks.

Further noted that the company had failed to furnish sufficient evidence showing that its products met the technical requirements necessary to qualify as synthetic textile goods. To announce its final ruling, the court cited an earlier judgement of the Madhya Pradesh High Court in a case titled Raj Pack Well Ltd v. Union of India and upheld the classification of the bags as plastic products under heading 3923 2900. The assessee’s appeal was dismissed.