Foam cup pads attracts GST@18%

The AAR, Uttar Pradesh, in M/s MaavisaFom Cup Private Limited [Advance Ruling No. ADRG -28/2023 dated June 19, 2023] ruled that foam cup pads are to be classified under the HSN 39262091, thereby attracting GST @18%.

Facts

M/s. Maavisa Fom Cup Pvt. Ltd. ("the Applicant") engaged in the manufacturing of highly specialized foam cup pads in state of art machine which are supplied to women's brassier (ladies bra) manufacturers.

The material used for manufacturing of these pads include foam made of polyutherane, glue and fabric.

The Applicant has sought advance ruling to confirm the exact HSN code out of the 39269079, 62129090, and 39262091 for billing of Foam Cup Pads, as finished products, which is supplied to manufacture brassier by manufacturers.

Issue

Whether the 'Foam cup pads' manufactured by the Applicant can be classified under HSN 39269079?

Held

The AAR, Uttar Pradesh, in Advance Ruling No. ADRG-28/2023 ruled as under:

• Observed that, the Chapter 62 "Articles of apparel and clothing accessories, not knitted or crocheted' falls under Section XI "Textile and Textile Articles".
• Further observed that, Section 1 Note which states that this Section i.e. Section XI does not cover- 'woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated or covered or laminated with plastics or articles thereof of chapter 39'. Since, the "foam pad cup" by character is an insulating liner made of polyutherane foam, hence the product in question does not merit classification under Chapter 62.
• Noted that, the description of heading 39269079 pertains to 'Plastic or nylon tipped hammers; insulating liner of nylon'. However, the product has essential character of insulating liner made of polyutherane foam and polutherane foam is the basic material used in manufacture of the foam cup pads, the same cannot be considered as insulating liner of nylon to merit classification under heading 39269079.
• Observed that, As per 'Note 1 of Chapter 39 Plastics and articles thereof’ the Polyutherane is a plastic material which exists in various forms. 
• The heading 3909 reads —"Amino —resins, phenolic resins and polyutheranes, in primary forms", thus Polyutherane in primary form is classified under heading 3909. Accordingly, it satisfy the definition of "plastics "as per chapter Note 1. Thus, 'Foam cup pads' can be considered as articles of plastics/and articles of other materials of headings 3901 to 3914. 
• The heading 3926 reads —"Other articles of plastics and articles of other materials of headings 3901 to 3914". Since, there is no other specific entry for 'Foam cup pads'. Thus, the 'Foam cup pads' is classifiable under heading 3926.
• Held that, the product is essentially - article of plastics/and articles of other materials of headings 3901 to 3914, articles of apparel and clothing accessories, and made of polyutherane foam. Hence the product will be classified under HSN Code 39262091.

Relevant legal extracts

Note 1 to Chapter 39 of the Customs Tariff Act

Throughout this Schedule, the expression "plastics" means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence.