Fusible Interlining Cloth is not a Woven Fabric

The Appellate Authority for Advance Ruling in West Bengal has ruled that fusible interlining cloth is not a woven fabric and falls under HSN 5903, so Goods and Service Tax at the rate of 12% is applicable. The appellant is a manufacturer of fusible interlining cloth, a type of cloth that was classified under Chapters 52 to 55, as clarified under Circular No. 5/89 dated 15/06/1989. This type of cloth was later classified under Chapter 59 in the Budget of 1989 under the heading 5903 along with textile fabrics, partially or discretely coated with plastic by the dot printing process. However, this chapter was omitted after the Budget of 1995, and hence the appellant claims that the cloth no longer falls under the heading 5903. Moreover, copies of invoices issued by the appellant indicate that the cloth is being classified under the sub-heading of 5208. The applicant contended that the West Bengal AAR ignored the judgment in another case wherein similar facts and circumstances were presented, and the AAR bench of Uttarakhand had held that such fabrics would fall under Chapter 52 or 55, 58 or 60 of the Tariff Act and not Heading 5903. The AAAR observed that the exclusion clause under Chapter 59 is not applicable to fusible interlining cloth manufactured by the appellant. As such, the product merits classification under sub-heading 5903 of the Tariff. A fusible interlining cloth is not a woven fabric and falls under HSN 5903, and a GST of 12% is applicable.