Gujarat AAR Rules 5% GST Applicable on Imitation Zari Thread Made from Metallised Polyester/Plastic Film
Pranav B Prem
The Gujarat Authority for Advance Ruling (AAR) has held that the supply of imitation zari thread or yarn manufactured from metallised polyester or plastic film containing aluminium metal and commonly used in sarees and dress materials in lieu of real gold or silver zari, attracts 5% GST under the present rate structure. The ruling was delivered on November 29, 2025 by Member (Central Tax) Shri Vishal Malani and Member (State Tax) Smt. Sushma Vora.
The applicant had sought clarification on the applicable GST rate for imitation zari thread or yarn made from lacquer-coated polyester or plastic film with aluminium metal. The AAR noted that various types of zari are available in the market, including real zari made from gold or silver, imitation zari made from aluminium, copper or similar metals, and metallic zari made from slitted polyester metallised film. The authority further observed that owing to the rising cost of pure gold and silver sheets, many zari manufacturers have shifted to lightweight metal-based or plastic-based alternatives described as “malleable, durable, ductile,” and that imitation zari in different compositions is now widely used in sarees and garments as a substitute for real zari.
In its analysis, the AAR relied on the 52nd GST Council Meeting, which recommended rate rationalisation for imitation zari thread or yarn made from metallised polyester or plastic film under HSN 5605. The ruling also referred to Sl. No. 218AA inserted vide Notification No. 09/2023 dated July 26, 2023, creating a consolidated 5% GST entry for metallised yarn, including real and imitation zari. The authority noted that this replaced the earlier 12% GST under Serial No. 137, which carried the description “Metallised yarn, whether or not gimped, being textile yarn, or strip or the like of heading 5404 or 5405, combined with metal in the form of thread, strip or powder or covered with metal; such as Real zari thread (gold) and silver thread, combined with textile thread), Imitation zari thread”.
The AAR concluded that following the rate rationalisation, imitation zari thread or yarn made from metallised polyester or plastic film merits classification under HSN 56050020 and attracts 5% GST, in line with the amendments to the Schedule and the clarification issued by the GST Council. The ruling also recorded that Circular No. 205/17/2023-GST dated October 31, 2023 clarified that imitation zari thread made from metallised polyester or plastic film is classifiable under HSN 5605 and taxable at 5%, and that the same position is reflected in the HSN-wise GST rate chart notified vide Notification 09/2025-CT(R) dated September 17, 2025 (effective September 22, 2025).
Based on these findings, the Gujarat AAR held that imitation zari thread manufactured using plastic/polyester film with aluminium metal is covered under the 5% GST bracket post rate rationalisation. The application was disposed of accordingly.
Relying on GST Council deliberations, statutory notifications, circulars and the post-rationalisation tariff structure, the Gujarat AAR has ruled that imitation zari thread or yarn made from metallised polyester/plastic film with aluminium metal is classifiable under HSN 56050020 and attracts 5% GST, departing from the earlier 12% rate applicable under Serial No. 137.
Applicant's Name: Sri Ram Jari Industries
