PVC Raincoat is not a textile product, so it will attract 18 per cent GST, West Bengal’s Authority for Advance Ruling (WBAAR) ruled on the applications filed by Dollar and Aristocrat.
Dollar Industries, Dollar Garments and Aristocrat Industries approached the WBAAR to get advance ruling on whether raincoat made from polyvinyl chloride (PVC), a synthetic polymer, should be classified as plastics article or textile article. It may be noted that in case of textile product, there are two standard rates, 5 per cent for value of ₹1000 or below and 12 per cent in case value is more than ₹1000.
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After going through all the submissions made and facts presented, WBAAR observed that PVC, also called Vinyl, is a highly versatile thermoplastic polymer. It is known for its durability, affordability, and resistance to chemicals. PVC is a lightweight material. It is easy to work with and can be molded into various shapes, making it a go-to choice for many applications. Affordable PVC raincoats offer excellent waterproofing, making them a practical and budget-friendly choice for staying dry in the rain.
The quasi-judicial body noted PVC raincoats are produced by cutting large PVC rolls into sections that correspond to the various components of the raincoat, including the front panel, back panel, sleeves, and pockets. Maintaining waterproofing quality is utmost important, therefore, traditional stitching is avoided, as needle perforations would compromise the water resistance of the garment.
Instead, “the applicant(s) employ a specialized fusion method wherein components are thermally or chemically bonded to create a seamless, non-woven structure that enhances the waterproof integrity. Additional features such as polyester zippers, drawcords, buttons, and plastic stoppers are attached to finalize the product, which is then distributed to the market as a finished raincoat,” it said.
Highlighting the ruling by the Supreme Court in the matter of Porritts & Spencer (Asia) Ltd. vs State of Haryana, 1978, WBAAR said that the word ‘textiles is derived from the Latin ‘texere’ which means ‘to weave’ and it means any woven fabric. When yarn, whether cotton, silk, woollen, rayon, nylon or of any other description as made out of any other material is woven into a fabric, what comes into being is a ‘textile’ and it is known as such. It may be cotton-textile, silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile.
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Relying on various ruling, WBAAR said, “We are of the opinion that PVC sheet cannot be regarded as a woven fabric. Even in common parlance, the item PVC sheet is not considered as textile materials. We are therefore unable to accept the contention of the applicant that the item PVC raincoat would be classified under HSN 6201 40 10 since to qualify to be an item under chapter 62, it must be an article of textile fabric.”
Further, it said it is not disputing that the item PVC raincoat, in common parlance, is known as apparel. “We therefore find that the item being an apparel, which is primarily composed of polyvinyl chloride (PVC), would be classified under HSN 3926 20 as Articles of apparel and clothing accessories (including gloves, mittens and mitts),” it said. Accordingly, “Supply of PVC raincoat as manufactured by the applicant would be covered under Heading 3926 and would attract tax @ 18 per cent,” it said.