ORDER OF CLARIFICATION MADE BY SHRI RAMENDRA JAKHU,
FINANCIAL COMMISSIONER & PRINCIPAL SECRETARY,
GOVERNMENT OF HARYANA, EXCISE AND TAXATION
DEPARTMENT, UNDER SECTION 56(3) OF THE
HARYANA VALUE ADDED TAX ACT, 2003
Queriest: M/s Kirtiman Cements & Packaging Industries Ltd. ,
Manakpur Industrial Area, Jagadhari holding TIN No.
06631616453
M/s Kirtiman Cements & Packaging Industries Ltd., Manakpur
Industrial Area, Jagadhari, holding TiN No. 06631616453 is engaged
in manufacture and sale of HDPE bags and HDPE fabrics and has
sought clarification as to the tax liability if any on HDPE fabrics sold
by them, and if so, the rate of tax leviable under the Haryana VAT Act.
The applicant has further explained that theirs’ is a newly established
unit and they are charging VAT @ 4% on HDPE/LLDP fabrics
manufactured and sold by them whereas similar units operating in
the state are not charging any tax on such fabric manufactured and
sold by them. As per sub entry 133 and 134of entry 102 of Schedule
‘C’ of the Haryana VAT Act Linear Low Density Polyethylene(LLDPE)
and Low Density Polyethylene (LDPE) and High Density Polyethylene
(HDPE) attract VAT @ 4% being covered under “Industrial inputs
and packing materials”. Tariff item given against these products viz
LLDPE, LDPE and HDPE are 3901:10:00 and 3901:20:00 and, as per
the Central Excise Tariffs , Tariff item No. 3901:10:00 and 3902:20:00
pertain to polymers of Ethylene and propylene in primary forms and
hence the entries LLDPE , LDPE and HDPE pertain to polymers of
Ethylene and polymers of Propylene in primary forms and hence the
aforesaid entries signify of granules of LLDPE,LDPE and HDPE
whereas the applicant unit is manufacturing fabrics from such
granules and thus the products manufactured and sold by them are
not in primary form and hence not covered under sub-entry 133 and
134 of entry 102 of Schedule ‘C’ explained above. Since, as explained
by the applicant, some of the units are not charging VAT on the
HDPE and LDPE fabrics manufactured and sold by them, it needs to
be examined whether these products are covered under Schedule’B’ of
the Haryana VAT Act. Relevant entries in Schedule ‘B’ of Haryana
VAT Act for that purpose are entry 51 to 53 of the Schedule. Entry
51 of the Schedule includes “all varieties of cotton, woolen or
silken textiles including rayon, artificial silk or nylon but not
including such carpets, druggets, woolen durrees, cotton floor
durrees, rugs and all varieties of dryer felts on which additional
excise duty in lieu of sales tax is not levied”. Thus, entry 51 of
Schedule’B’ pertains to woolen and silken textiles including rayon,
artificial silk or nylon. Only HDPE and LDPE fabrics are not covered
under this entry. Entry 52 of Schedule’B’ covers “all varieties of
textiles covered by item 51 on which knitting and embroidery
work has been done provided additional excise duty in lieu of
sales tax is levied on them”. Thus the products manufactured by
the applicant firm are not covered under entry 52 as well. Entry 53
of Schedule ‘B’ includes “such varieties of canvas cloth tarpaulins
and similar other products manufactured with cloth as base as
are manufactured in textile mills, powerloom factories and
processing factories ( but not including transmission belts)
provided additional excise duty in lieu of sales tax is levied on
them”. However, the products manufactured by the applicant firm do
not have cloth as base and hence are not covered under entry 53 of
Schedule’B’ as well. From the facts discussed above, it is clear that
the products manufactured by the applicant firm are neither covered
under Schedule ‘C’ of the Haryana VAT Act nor under Schedule ‘B’ of
the Haryana VAT Act and hence are unclassified goods liable to be
taxed @ 12.5%.
Matter is clarified accordingly.
(RAMENDRA JAKHU)
Chandigarh Financial Commissioner & Principal Secretary
Dated: to Govt. Haryana, Excise and Taxation Department.
Issued vide letter no. 1713-1715/ST-1,Dated 10/12/2009
