GST Rate for Imitation Zari Thread: Gujarat Advance Ruling GUJ/GAAR/R/2025/58
The Gujarat Authority for Advance Ruling confirmed that imitation zari thread made from metallised polyester film attracts a 5% GST rate.
- Ruling
- GUJ/GAAR/R/2025/58 dated 29/11/2025
- Dated
- 29 Nov 2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The company asked for the correct GST rate on imitation zari thread.
- The authority classified the product under HSN 56050020.
- The applicable GST rate for this product is 5%.
In short
The company asked the Gujarat Authority for Advance Ruling to clarify the GST rate for imitation zari thread, also known as metallic yarn. They wanted to know if their product, made from lacquered coated polyester film with aluminium, qualified for a lower tax rate.
What has changed
How it worked before
Businesses were uncertain about the correct classification and tax rate for imitation zari thread, with some previously paying 12% GST.
What has changed
The authority confirmed that this specific type of imitation zari thread falls under the 5% GST slab. This provides clarity for manufacturers that their product is eligible for this concessional rate.
Who this affects
Manufacturers and suppliers of imitation zari thread, metallic yarn, or zari badla made from metallised polyester film.
An example
A textile manufacturer in Surat produces metallic yarn using lacquered polyester film and aluminium. They are currently charging 12% GST but are unsure if they qualify for the 5% rate. Based on this ruling, they should review their product specifications against the HSN 56050020 criteria. If their product matches, they may consider adjusting their tax rate to 5% after discussing it with their tax consultant.
What you should do
This ruling only applies to the company that asked the question. If you manufacture similar products, you can use this ruling as a reference for your own tax position, but you should consult your tax advisor to ensure your specific product matches the technical description used in this ruling.
If you do nothing
If you apply this 5% rate without confirming your product matches the exact technical description, you risk underpaying your taxes. A tax officer may disagree with your classification, leading to demands for the difference in tax, interest, and potential penalties. Always ensure your specific goods align with the ruling's findings before changing your tax treatment.
The terms explained
- HSN
- Harmonized System of Nomenclature is a standardized system used to classify goods for taxation purposes.
- Metallised yarn
- A type of thread made by coating plastic film with metal, often used in embroidery and textiles.
- Concessional rate
- A lower tax rate provided by the government for specific goods or services to support certain industries.
The ruling in detail
Authority for Advance Ruling
M/s. Sai Ram Jari Industries
GUJ/GAAR/R/2025/58 dated 29/11/2025 · Gujarat
Questions before the authority
- What is the HSN and GST Rate applicable on supply of imitation zari thread or yarn (also known as 'Metallic Yarn', 'Zari Badla' or any other name in trade parlance) made from Plastic Film / Lacquered Coated Polyester film with Aluminium Metal?
Facts
The applicant is engaged in the manufacturing and supply of imitation zari thread or yarn made from lacquered coated polyester film with aluminium metal. They sought clarification on the applicable HSN and GST rate following amendments to notification entries. The applicant previously classified the product under HSN 5605 and discharged GST at 12%, but later sought confirmation regarding the 5% rate.
Ruling
| Question | What the authority ruled |
|---|---|
| HSN and GST rate for imitation zari thread/yarn | HSN 56050020, GST @ 5% Applicable under serial no. 218AA of Schedule I (1/2017-CT) from 27.07.2023 to 21.09.2025 and serial no. 353 of Schedule I (9/2025-CT) from 22.09.2025 |
The authority ruled that the subject goods are classifiable under HSN 56050020 and attract a GST rate of 5%. This classification and rate apply for the period from 27.07.2023 to 21.09.2025 under serial no. 218AA of Schedule I of notification no. 1/2017-CT(Rate), and from 22.09.2025 onwards under serial no. 353 of Schedule I of notification no. 9/2025-CT(R).
Reasoning
The authority relied on the **HSN explanatory notes** for heading 5605, which covers metallised yarn made from plastic film coated with metal. It considered the legislative intent expressed in the 15th and 52nd GST Council meetings to tax such imitation zari at a concessional rate. The ruling is based on a conjoint reading of notification no. 1/2017-CT(Rate), notification no. 9/2023-CT(Rate), notification no. 9/2025-CT(R), and circular no. 205/17/2023-GST. These provisions collectively confirm that the specific product falls under the **5% GST slab**.
Provisions relied on
- Section 97(2) of CGST/GGST Act, 2017
- HSN 5605
- Notification No. 1/2017-Central Tax (Rate)
- Notification No. 9/2023-Central Tax (Rate)
- Notification No. 9/2025-Central Tax (Rate)
- Circular No. 205/17/2023-GST
For the practitioner
This ruling provides **definitive classification** for manufacturers of imitation zari thread made from metallised polyester film. It settles the ambiguity regarding the applicable GST rate by confirming the **5% concessional rate** under the specified serial numbers. Practitioners can use this to support the 5% tax treatment for similar products, provided they meet the technical description of being made from lacquered coated polyester film with aluminium metal.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/58_sairam_jari_compressed.pdf
Legibility of the scan, as read: high.
Prepared 14-10-2026.
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