The West Bengal Authority of the Advance Ruling (AAR) in the case of Shopinshop Franchise Pvt. Ltd. vide Order No. 27/WBAAR/2022-23 dated 09.02.2023, has ruled that bouquets made with dry parts of plants, such as foliage, flower buds, grasses, and branches of plants, are exempt from GST.
In this case, the applicant is engaged in manufacturing and processing of dry parts of plants, foliage, flower buds, grasses and branches of plant which are dried, bleached, dyed and coloured for decorative and ornamental purposes and sold as bouquets made with dried parts of plants and packed in plastic foil packaging.
The issue in this case was whether the bouquets made with dry parts of plants, such as foliage, flower buds, grasses, and branches of plants that are bleached, dyed and coloured for decorative and ornamental purposes and sold with plastic foil packaging would be considered as “Exempt supply” under GST as covered under HSN code 06049000.
The Applicant submitted that the Bunches/Bouquet made from dry parts of plants and dry flowers would be covered under HSN 0604 and therefore supply of such goods would be treated as exempt supply. The applicant, in this context, draws references to Note 2 under Chapter 6 of the First Schedule to the Customs Tariff Act, 1975 which reads as follows:
“Any reference in heading 0603 or 0604 to goods of any kind shall be construed as including a reference to bouquets, floral baskets, wreaths and similar articles made wholly or partly of goods of that kind, account not being taken of accessories of other materials. However, these headings do not include collages or similar decorative plaques of heading 9701.”
The AAR observed that the applicant collects dried parts of various plants from plant growers/vendors, clean & sort the items, dye/colour the items as per specifications and pack the items in plastic foil packaging in pieces/bunches/bouquet. In other words, the raw materials undergo some sort of processing before packing with a simple plastic foil packaging. Further, the AAR noted that Chapter 6 of the GST Tariff deals with “live trees and other plants; bulbs, roots, and the like; cut flowers and ornamental foliage is exempted from payment of tax.
The AAR held that the supply of bouquet made with dry parts of plants, foliage, flower buds, grasses, and branches of plants that are dried, bleached, dyed, and colored for decorative and ornamental purposes and sold with plastic foil packaging will be classifiable under Tariff Item Nos. 0639000 or 06049900, whether individually or in combination, is also exempt from the payment of tax.