The Gujarat Authority has rolled out an important decision regarding the supply of imitation zari thread or yarn for Advance Ruling (AAR). The material in question, if it is manufactured from metallised polyester or plastic film containing aluminium, will be applied with 5 per cent GST as per the current rate structure.
The zari thread or yarn, which is said to have aluminium, is mainly used for sarees and dress materials, which act as a substitute for real gold or silver zari. The announcement of the applicable 5 per cent tax was made on November 29, 2025, by Member (Central Tax) Shri Vishal Malani and Member (State Tax) Smt. Sushma Vora.
Clarification has been requested by the applicant, considering the GST rate applicable to imitation zari thread or yarn made from lacquer-coated polyester or plastic film with aluminium metal. According to AAR, there are various zari available in the market, which also include real zari crafted from gold or silver, imitation zari made from aluminium, copper, or similar metals, and metallic zari created from slitted polyester metallised film.
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The authority further noted that because of the rising price of pure gold and silver sheets, there are many zari manufacturers who are opting for lighter, metal-based or plastic-based alternatives that are described as “malleable, durable and ductile.” This results in imitation zari in different compositions, which have been continuously used in garments and sarees in place of the real zari.
The analysis of the AAR sheds light upon the 52nd GST Council Meeting, which made suggestions about the rate rationalisation as considered for imitation zari thread or yarn made from metallised polyester or plastic film, classified under HSN 5605.
The ruling further brought reference to Sl. No. 218AA, introduced through Notification No. 09/2023 on July 26, 2023, which set a unified 5 per cent GST rate for metallised yarn, covering both real and imitation zari.
It has been further noted by the authority that this new rate replaced the earlier 12 per cent GST under Serial No. 137, which described “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.”
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It has been concluded by the AAR, which has determined that following the rate adjustments, imitation zari thread or yarn made from metallised polyester or plastic film is categorised under HSN 56050020 and is subject to a 5 per cent GST. This has been aligned with the recent amendments to the Schedule and the clarifications provided by the GST Council.
In addition to this, the ruling also highlighted that Circular No. 205/17/2023-GST, dated October 31, 2023, also confirms that imitation zari thread crafted from metallised polyester or plastic film falls under HSN 5605 and is subject to the said tax. The exact position has also been further reflected in the HSN-wise GST rate chart outlined in Notification 09/2025-CT(R), which was issued on September 17, 2025 and has been effective from September 22, 2025.
With reference to these findings, the Gujarat AAR is considering that the imitation zari thread produced using plastic or polyester film with aluminium metal now fits within the 5 per cent GST category after the rate rationalisation, and the application was resolved accordingly.
Drawing on discussions from the GST Council, relevant notifications, circulars and the updated tariff structure, the Gujarat AAR ruled that imitation zari thread or yarn made from metallised polyester or plastic film with aluminium metal is classified under HSN 56050020 and is now subject to a 5 per cent GST, moving away from the previous 12 per cent rate listed under Serial No. 137.
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