The Gujarat Authority for Advance Rulings (GAAR) has ruled on the classification of fusible interlining cotton fabrics. The applicant, Girish Pravinchandra Rathod, manufactures these fabrics by applying a dot-matrix of pulverized plastic powder to one side of the cotton fabric. The coating is partial and allows the fabric to remain air- and water-permeable. Previously, these fabrics were classified under HSN 5903, which includes textile fabrics impregnated or coated with plastics. However, the applicant contested this classification, leading to a legal review.
The Gujarat High Court had earlier determined that the fabric, being only partially coated and retaining its cotton characteristics, should not fall under Chapter 59. The High Court directed that the classification should be based on the fabric's composition, under Chapters 50–55, 58, or 60. The Supreme Court upheld this view by dismissing the Department's Special Leave Petition, reinforcing the High Court's decision.
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Following the remand, GAAR examined technical reports and found that the fabric's cotton content was 85% or more, and the coating was non-film-forming, thus not creating a continuous plastic layer. Consequently, the authority concluded that these fabrics should be classified under Chapter 52, which pertains to cotton fabrics, rather than under Heading 5903. This decision aligns with existing interpretations and rulings, including Circular No. 5/89 and the CESTAT ruling in Madura Coats (2019), which support the classification based on the base material when coatings are not film-forming.
Case Title: Girish Pravinchandra Rathod (Jay Ambe) – Classification of Fusible Interlining Fabrics
Order No.: ADVANCE RULING NO. GUJ/GAAR/R/2025/45
Order Date: 01 November 2025
Facts
- The applicant manufactures Fusible Interlining Fabrics of Cotton, created by coating one side of cotton fabric using dot-matrix application of pulverised plastic powder.
- The coating is partial, porous, non-continuous, and the fabric remains air- and water-permeable. Earlier, GAAR and AAAR classified the goods under HSN 5903 as “textile fabrics impregnated, coated or covered with plastics.”
- The applicant challenged this before the Gujarat High Court, which held (14.06.2024) that the fabric is not fully coated, It loses no fundamental characteristics of cotton fabric, partially coated products cannot fall under Chapter 59 after deletion of Note 2(c).
- The High Court remanded the matter with clear directions to classify the goods under Chapters 50–55, 58 or 60, depending on fibre composition.
- The Department filed an SLP, which the Supreme Court dismissed on 16.05.2025, affirming the High Court view. On remand, GAAR examined technical test reports, including ATIRA, confirming that cotton content was 85% or more, and coating was non-film-forming.
Issue
- Whether fusible interlining cotton fabric, partially coated with plastic powder, should be classified under Chapter 52 as cotton fabric or under Chapter 59 as impregnated/coated textile fabric?
Order
- The authority ruled that the High Courts ruling is binding as partially coated fabrics cannot be classified under Heading 5903.
- Test reports confirm the coating is not continuous, does not create a plastic layer, and the fabric remains porous, placing it outside Chapter 59 as per Chapter Note 2(a)(4).
- After deletion of Note 2(c) (16.03.1995), textile fabrics partially coated with plastics must be classified according to base material, i.e., under Chapters 52–55, 58 or 60. Circular No. 5/89 and CESTAT ruling in Madura Coats (2019) support the same interpretation.
- Since the fabric is predominantly cotton, classification falls squarely under Chapter 52 (Cotton Fabrics).
- Therefore, it ruled that the Fusible Interlining Cotton Fabrics manufactured by the applicant are classifiable under HSN Chapter 52, not under Heading 5903.
