18% GST Payable On Foam Cup Pad: AAR

The Uttar Pradesh Authority of Advance Ruling (AAR) has ruled that 18% GST is payable on foam cup pads.

The bench of Amit Kumar and Harilal Prajapati has observed that the foam cup pad’ made of polyurethane, glue, and fabric, is to be classified under heading 39262091.

The applicant is in the business of manufacturing highly specialised foam cup pads on state-of-the-art machines using raw materials including foam made from polyurethane, glue, and fabric.

The applicant has sought an 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 are supplied to manufacture brassieres (ladies' bras) by manufacturers.

The question was about the classification of goods and is hence admissible under Section 97(2)(e) of the CGST Act 2017. As per the declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act against the applicant.

The applicant contended that the raw materials used by the applicant for manufacturing foam cup pads include foam made of polyurethane, glue, and fabric. Since the foam pad cup by nature is an insulating liner made of polyurethane foam, they were invoicing their goods under HSN code 39269079 with an applicable rate of 18%.

As per the applicant, the foam cup pads are manufactured using polyethene, glue, and fabric. Thus, foam cup pads’ can be considered articles of plastic or articles of other materials under 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’ are classifiable under heading 3926.

The AAR held that the description of heading 39262091 pertains to articles of apparel and clothing accessories (including gloves, mittens, and mitts) of polyurethane foam. Since the product is essentially an article of plastics or articles of other materials of headings 3901 to 3914, articles of apparel and clothing accessories, and made of polyethene foam, hence, the product will be classified under HSN Code 39262091 on merit.

Applicant’s Name: Maavisa Fom CUP Private Limited

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