Case of Kerala Cooperative Milk Marketing Federation Ltd, AAR Kerala Ruling Dated 28th April 2026. AAR ruled that the used gunny bags (jute sacks without plastic coating) arising during the course of manufacturing and sold by the applicant are not classifiable as scrap, but as reusable packing bags under Heading 6305 of the Customs Tariff Act. Accordingly, the applicable GST rate is 5% where the sale value does not exceed Rs. 2500 per piece, and 18% where the sale value exceeds Rs. 2500 per piece. in terms of Notification 09/2025 (Rate), dated 17th September 2025. It is clarified that where such bags are worn out, torn, or reduced to cuttings or waste, rendering them unfit for reuse as packing material, the classification may differ.