2026-VIL-107-AAR
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SGST Advance Ruling Authority

GST – Kerala AAR - Classification od used Gunny Bags - Whether used gunny bags without plastic coating, arising after use in packing of raw materials are classifiable as reusable packing bags under Heading 6305 of the Customs Tariff Act, 1975 attracting GST at 5%, or as waste or scrap under other headings attracting GST at 18% - HELD – The classification must be determined based on the common parlance, commercial identity, essential character, condition at the time of supply, and intended use of the goods. The goods do not become waste or scrap merely on account of prior use so long as they retain their identity and functional utility, since waste and scrap arise only when goods lose their original utility and are fit solely for recovery of constituent material - The impugned goods were intact, bundled and capable of reuse without further processing as evidenced by photographic material and sale invoices describing them as old gunny bags supplied as identifiable packing material, such goods clearly retained their form, structure and commercial identity as packing sacks - The Heading 6309 expressly excludes sacks and bags showing signs of wear from its ambit and directs their classification under their respective headings, while Heading 6310 applies only to worn-out textile materials reduced to cuttings or fragments fit solely for recovery, conditions which the impugned goods did not satisfy - Applying the GST rate notification, it is held that goods falling under Heading 6305 attract GST at 5% where the sale value does not exceed rupees two thousand five hundred per piece, and 18% where the sale value exceeds rupees two thousand five hundred per piece, with the clarification that where such bags are worn out, torn or reduced to waste rendering them unfit for reuse, the classification may differ and would require independent examination - The used gunny bags without plastic coating are classifiable under Heading 6305 as reusable packing bags and attract GST at 5% where sale value does not exceed rupees two thousand five hundred per piece and 18% where it exceeds that threshold – Ordered accordingly
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