Power to issue clarifications on goods classification vests with CBITC only, says Delhi HC

The Delhi High Court on Thursday quashed a government's tax research unit’s 2018 circular on classification of polypropylene woven and non-woven bags on the grounds that it had no authority to issue any clarification under the Central Goods & Services Tax Act 2017. It said that the power to issue such clarifications vests exclusively with the Central Board of Indirect Taxes and Customs.

The tax research unit had classified polypropylene woven and non-woven bags including those laminated with biaxially oriented polypropylene under chapter 39 of customs tariff law, which deals with plastics and articles thereof, thus a higher duty at 15% rate was to be levied.

The Association of Technical Textiles Manufacturers and Processors had moved the HC alleging that polypropylene woven or non-woven bags are made out of textiles and thus cannot be equated with plastics and lesser rate of duty between 10 to 20% was to be levied.


However, the HC refused to express any opinion on the classification and left it open for the consideration by the competent authority in an appropriate proceeding.