Skinco Products ., In re
Date: July 14, 2024
Subject Matter
'Recron Filled Baby Net Bed' is classifiable as a Mattress, attracting 18% GST
Summary
In the case of M/s. SKINCO Products, the Authority for Advance Ruling (AAR) in Kerala analyzed the GST classification and applicable tax rate for the product “Recron filled baby net bed.” The company, a manufacturer of newborn products, sought clarity on the GST rate for their product, which is primarily a baby bed filled with Recron, a type of polyester fiber, and included features such as a mosquito net. The AAR confirmed that the core purpose of the product is that of a mattress or baby bed, and thus it is classified under Customs Tariff Head 9404, which covers mattresses without differentiation based on age or materials. The investigation included reviewing various GST rate entries, particularly from Notification No. 1/2017-Central Tax (Rate), concluding that the item falls within the amended Entry No. 438 of Schedule III, which is subject to an 18% GST rate (9% CGST and 9% SGST). The ruling stresses the significance of correctly classifying composite goods based on their essential character and highlights the importance of updated GST notifications in determining tax liabilities.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, KERALA
1. Sri Biju Perumattikunnel Alexander, M/s. SKINCO Products, ELP III-573, Athirakam, Mundayad.P.O, Kannur (hereinafter referred to as the applicant) is a manufacturer of baby dresses, baby bed, pillows and baby wrappers.
2. In this ruling, a reference to the provisions of the CGST Act, Rules and Notifications issued there under shall include a reference to the corresponding provisions of the KSGST Act, Rules and the Notifications issued there under.
3. Applicant requested advance ruling on the following: The advance ruling is sought on the GST rate of “Recron filled baby net bed”.
4. The contentions of the applicant:
4.1. The applicant is a registered tax payer under the CGST Act, engaged in manufacturing and supply of materials used for new born babies such as baby dresses, baby bed, pillows and baby wrappers. The applicant started business in the year 2014.
4.2. The applicant submits that baby beds in question are manufactured using raw materials such as cotton fabrics, poly staple fibre, zip and runner, plastic pipe and cotton. The initial process of manufacturing a baby bed is to make the bed by filling poly staple fibre, which is also called Recron. Recron is a specially engineered hollow polyester fibre used for filling pillows, which is available as a bi-product from petrochemicals. For manufacturing the bed, the fibre is covered using cotton fabrics. The plastic pipe is attached to the bed for making arch to fit the cotton net to cover the bed, to protect from mosquitoes. Zip and runners are attached with the mosquito net to close the same. The final finished product is a baby bed with cotton mosquito net.
5. Comments of the Jurisdictional Officer:
The application was forwarded to the jurisdictional officer as per provisions of Section 98(1) of the CGST Act. The Jurisdictional officer reported that there is no adjudication process initiated or completed against the applicant under the CGST/SGST Act 2017.
6. Personal Hearing:
A personal hearing was granted to the applicant on 21/06/2024. Shri.Biju Perumattikunnel Alexander, Proprietor of the firm appeared in the personal hearing. He reiterated the contentions made in the application and requested to issue a ruling based on the submissions in the application and submissions presented at the time of hearing.
6. Discussion and Findings:
6.1. On carefully reviewing the application, the statement of facts, and the submissions made during the personal hearing, we find that the questions for which the advance ruling is being sought fall within the scope of clause (a) of sub-section (2) of section 97 of the CGST Act, which pertain to the “classification of any goods or services or both”. Therefore, the application has been accepted for further consideration based on its merits.
6.2. The issue to be decided is the rate of tax applicable on a specialized material used for new born babies, viz, “Recron filled baby net bed”, which is manufactured using different raw materials having different GST rates. The important raw material used for making the goods is recron or poly staple fibre, which is filled in cotton fabrics to make the baby bed. Recron is a polyester fibre, which is a bi-product from petrochemicals.
6.3. On verification of the description of the product, we find that the item in question is essentially a baby bed or baby mattress. In order to determine the rate of GST applicable to the said item, the classification of the item needs to be determined. Mattresses are classified under Customs Tariff Head 9404. Under Customs Tariff, there is no differentiation based on whether the mattress is a baby mattress or not. All types of mattresses fall under the heading 9404 irrespective of the variations in materials used in the making of the item. Thus we find that 9404 is the most appropriate classification of the item in question.
6.4. The Tariff head 9404 appears under various schedules of Notification No.1/2017- Central Tax (Rate) dated 28-06-2017. The evaluation of the baby mattress with regard to those entries is as follows.
| Schedule | Entry No | Description | Remarks |
| II | 223 | Coir products (except- coir mattresses) | Not applicable since the item in question is not a coir product. |
| II | 224 | Products wholly made of quilted textile materials. | Not applicable since the item in question is not wholly made of quilted textile materials. |
| III | 438 | Coir mattresses, cotton pillows, mattress and quilts. | Not applicable since the item in question is not a coir mattress. |
| IV | 213 | Mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered | This entry seems to cover the item in question specifically. |
However, entry No 213 was omitted from Schedule IV vide Notification No.41/2017-Central Tax (Rate) dated 14-11-2017 and the specific heading was added to entry No 438 under Schedule III, which enlists goods falling under GST rate of 18 % (9% CGST and 9% SGST).
6.5. Thus, we are of the opinion that the product under review, viz, “Recron or poly staple fibre filled baby net bed” falls under the description “Mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered” which is liable to be classified under Schedule III of Notification No.1/2017-CT (R) dated 28.06.2017 as amended vide notification No.41/2017-Central Tax (Rate) dated 14-11-2017.
Given the observations stated above, the following ruling is issued:
RULING
Question: GST rate of “Recron filled baby net bed”.
RULING: The product “Recron filled baby net bed” will be taxable @ 18% (CGST @ 9% and SGST @ 9%) under sl.no. 438 of schedule III to Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as amended vide Notification No.41/2017-Central Tax (Rate) dated 14-11-2017.