Page 130 - GSTL_6th August 2020_Vol 39_Part 1

56 GST LAW TIMES [ Vol. 39
per Sl. No. 224 of Schedule I of Notification 1/2017-C.T. (R), dated 28-6-2017 as
amended and SGST @ 2.5% in case selling price is less than Rs. 1000/ piece as per
Sl. No. 224 of Schedule I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O.
(Ms) No. 62, dated 29-6-2017 and in case of selling price more than Rs.
1000/piece then it will attract 6% CGST as per S. No. 171 of Schedule II of Notifi-
cation 1/2017-C.T. (R), dated 28-6-2017 as amended and SGST @ 6% as per S. No.
171 of Schedule II of Notification Ms. No. II(2)/CTR/532(d-4)/2017 vide G.O.
(Ms) No. 62, dated 29-6-2017.
7.6 Chenille Yarn : The applicant has stated that they buy Raw materi-
als like core and pile yarn from outside which are subjected to creeling, twisting
and then wound on empty cops to form chenille cops weighing 300 gms. These
cops are fed to winding machine to make big bobbins weighing around 2 kg. Af-
ter winding, labels are pasted and sent to dye house, which is checked for quality
and used in the weaving section for fabric production. The applicant has stated
that the yarn is captively used but they may go for commercial sales. The test
report No. 303/2019-20 is furnished wherein the customer sample reference is
quoted as ‘Chenille yarn’. The test results states that the yarn is polyester with
100% composition of Polyester with the description ‘Polyester Chenille yarn’ and
HS Code 5606. From the submissions, it is evident that the product is a type of
special yarn obtained by a specified process and the composition of the yarn at
hand is man-made filament. The product is classifiable in Chapter 56 of the Cus-
toms Tariff - ‘Wadding, felt and nonwovens; Special yarns; twine, cordage, ropes
and cables and articles thereof;’ and more specifically under Heading 5606. For
ease of reference, the said heading is given below :

5606 GIMPED YARN, AND STRIP AND THE LIKE OF
HEADING 5404 OR 5405, GIMPED (OTHER THAN
THOSE OF HEADING 5605 AND GIMPED
HORSEHAIR YARN); CHENILLE YARN (INCLUDING
FLOCK CHENILLE YARN); LOOP WALE-YARN
5606 00 - Gimped yarn, and strip and the like of heading 5404 or 5405,
gimped (other than those of heading 5605 and gimped horsehair
yarn); chenille yarn (including flock chenille yarn); loop wale-
yarn :
5606 00 10 --- Trimmings, of cotton
5606 00 20 --- Trimmings, of man-made fibres
5606 00 30 --- Trimmings, of zari
5606 00 90 --- Other

And as per the Explanatory Notes (HSN), Chenille yarn is defined as under :
(B) CHENILLE YARN (INCLUDING FLOCK CHENILLE YARN)
Chenille yarn consists generally of two or more strands of textile yarn
twisted together and gripping short ends of textile yarn that may be practi-
cally perpendicular to them, the strands are sometimes maintained in loops
formed on a hosiery loom. In all cases, it looks like yarn tufted with pile
threads throughout its length. It is usually manufactured directly on special
looms (ring twister and Raschel knitting machines, for example) or by cut-
ting up special leno fabric : in the latter process, after the fabric has been cut
along either side of each group of warp threads, it is these warp threads
(ground and crossing threads) which serve as support in the chenille yarn,
and the weft which forms the pile.
GST LAW TIMES  6th August 2020  130