Rajasthan AAAR: Compostable Bags Taxable at 5% Only if Biodegradable

Rajasthan AAAR upheld the AAR and held Easy Flux Polymers’ bags fall under Chapter 39 as plastic bags/articles of plastics.
The 5% GST concession under Notification No. 09/2025 applies only to paper bags/sacks or to bags that are proven biodegradable; otherwise normal plastic-bag GST rates apply.
Whether a product is biodegradable/compostable is a technical matter for specialized agencies, not for advance ruling authorities to decide conclusively.
AAAR questioned the reliability of the appellant’s test reports and said one-time certifications may not prove ongoing eligibility for concessional GST.
It held GST authorities may take samples and rely on competent agencies to verify whether the bags qualify for the concessional rate.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.