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The PVC floor Mat would fall in the Customs Tariff heading 3918 and applicable rate of GST would be 18%

Shanti Prime Publication Pvt. Ltd.

Classification of goods—Rate of GST on floor mats / (floor coverings) made of (PVC textiles) PVC, known as PVC Carpet Mats or Floor coverings or Textile floor covering made up of PVC—In the instant case, appellant had proposed the classification of the product under chapter 5705 and being covered under entry no 146 of schedule II of the notification no 1/2017-CT(rate) and 1/2017-ST (rate) and attracting tax at the rate of 12% in total.
While AAR classified the product under chapter heading 3918 and rejected the classification of the appellant under chapter 5705.
The appellant challenged the decision of advance ruling.

Now, the question before appellate authority is that Whether the goods in question are classifiable under Tariff Item 3918 as held by AAR, or 5705 as claimed by the Appellant?

Held that—On perusal of the sample produced, it is found that it is in the form of a plastic web on exposed surface and with a sheet-like backing of plastic. The manufacturing process, as submitted in writing by the appellant, reveals that the said product is manufactured in two stages. In Stage One, a web of PVC is formed in roll form. In Stage Two, this web is impregnated with a lamination of PVC. These facts are not disputed. There also no dispute that the product is made of 100% plastic.
To avoid classification disputes under the GST regime, the Customs Tariff has been adopted for descriptive classification of goods under GST. Further, in case of any doubt, and for the exact classification of any goods, reference needs inevitably to be made to the Section and Chapter Notes provided therein, as has been done in this case by both the appellants and the Maharashtra AAR.

It is seen that Chapter 57 of the HSN falls under Section Xl of the Customs Tariff. Section Note 1(h) of Section Xl, relied upon by the AAR, excludes interalia non-wovens impregnated/coated with plastics. In their written submissions the appellant has claimed the said goods to be 'Non-woven' and impregnated/coated (as per their manufacturing process). Thus in view of Note 1(h) of Section Xl, the said goods are apparently excluded outright from this section. If the said goods are excluded from the section Xl, their classification under any Chapter under the Section would also be ruled out - The exposed surface of the article does not contain fabric or fibres, filaments or yarns, but is a web of PVC made from a moulding process in which T-shaped monofilaments result in the intermediate process. It is not the case of the appellants that that they manufactured the non-woven product (PVC web) by use of monofilament yarns. There are no identifiable fibres, filaments or yarns in the exposed surface of their product and the web like structure made from 100% PVC therefore does not qualify for the textile materials as specified in Note 1 to Chapter 57.

The appellant is already a manufacturer of the said goods and classifying the same under Chapter 39 in the pre-GST era. The appellant has not brought on record any change in the composition, nature or manufacturing process of the said goods from the pre-GST era to now which has compelled them to approach AAR for classification. The only change noticed and which was discussed during hearing also, is the higher rate of GST under HSN 3918 than under HSN 5705. But the rate of duty/tax cannot be a criterion for deciding the classification of any product.
The PVC Mats manufactured by the appellant, a sample of which was produced before us, are specifically covered under HSN 3918 as Floor Coverings of PVC in terms of Rule 1 of the Rules of Interpretation of Customs Tariff read with Note 1(h) to Section Xl and Note 1 to Chapter 57.

Ruling—The PVC floor Mat would fall in the Customs Tariff heading 3918 and applicable rate of GST would be 18% (9% each of CGST and SGST) - the order of AAR upheld. [2018] 3 TAXLOK.COM 37 (AAAR-Maharashtra)