Classification of goods-Rakhi-Whether classifiable as handicraft goods

M.D. Mohta, In re

Decision:    Against the assessee

Classification of goods-Rakhi-Whether classifiable as handicraft goods

Facts:

Applicant sought Ruling on classification of “Rakhi”, whether it was covered by the exeption under Notification No. 2/2017-Central Tax (Rate), dt. 28-6-2017.

Held:

The AAR held that , “Rakhi” is an independently identifiable product which may be made up of innumerable materials of no fixed or predetermined ratio, and yet retain its specific identity as a symbol of a bond involving the potential care of the sister by the brother, and not merely an assemblage of discrete materials. “Rakhi” cannot be termed as a “handicraft” item under GST under Notification No 32/2017- Central Tax dated 15-9-2017, (later amended as Notification No 38/2017-Central Tax dated 13-10-2017). The AAR also observed that “Rakhi” is not purely puja samagri as it is not an essential and integral part of any Puja or Religious Ceremony to pay obeisance to any Hindu deity, and that “Rakhi” has been historically used to emphasise the bond between Hindus and Muslims. “Rakhi”, therefore, cannot attract NIL rate of duty under Serial No 92(1) of the TRU Clarification, nor can it be considered “exempt” in terms of Serial no. 148 of the Exemption Notification since it is not listed therein.