2020 (1) TMI 1385 - AAR - GST

Classification of goods - Laboratory Reagent - classifiable under Tariff Heading 38220090 at S.No.80 of Schedule II or as Goods which are not specified in Schedule I, II, IV, V or VI at SI. No. 453 of Schedule III under the CGST Notification No.1/2017-Central Tax (Rate), dated 28th June, 2017 (as amended) and Notification No. 35/2017- State Tax 2 dated 30.06.2017? - HELD THAT - This Authority is of the unanimous view that the description All diagnostic kits and reagents mean all diagnostic kits and all diagnostic reagents. It does not include the laboratory reagents as argued by the applicant. Further, the configuration of diagnostic kits reveal that some reagents are also essential parts of the diagnostic kits. If these diagnostic reagents are removed/ separated from the kit, the kit will lose the utility of diagnosis. For example Ouchterlony Double Diffusion kit has Agarose as reagent. The term and used in the Entry No. 80 of Schedule II of rate Notification all diagnostic kits and reagents in this Entry essentially means diagnostic reagents. The Tariff Heading 3822 00 11 and 3822 00 12, 3822 00 19 and 3822 00 90 also applies to goods for medical diagnostic. So, it is clear that the term diagnostic kits and reagents does not include the laboratory reagents imported and supplied by the applicant. The LABORATORY REAGENT are Goods which are not specified in Schedule I, II, IV, V or VI of Notification No. 1/2017-Central Tax (Rate) and Integrated Tax (Rate), dated 28th June, 2017 and as such it is covered under Serial No. 453 of Schedule III of Notification No. 1/2017-Central Tax (Rate) and Integrated Tax (Rate) of HGST Act.

Summary

Issues involved:
1. Classification of laboratory reagents under GST Tariff.
2. Interpretation of Schedule II and Schedule III of CGST Notification No.1/2017-Central Tax (Rate).

Analysis:
1. The applicant, engaged in importing and supplying laboratory reagents, sought a ruling on whether laboratory reagents fall under Tariff Heading 38220090 or as "Goods which are not specified in Schedule I, II, IV, V or VI." The applicant argued that laboratory reagents are specifically covered under Tariff Heading 3822 and should be classified accordingly.
2. The applicant referenced the HSN classification, Customs Tariff Act, and GST notifications to support their claim. They highlighted that the Customs Appraising Department's interpretation was incorrect and that the specific description in Schedule II should prevail over the general description in Schedule III.
3. The applicant also pointed out an anomaly in the GST classification compared to the HSN classification, emphasizing changes made by the GST council and the intention behind such changes to include all items of Tariff Heading 3822 in Schedule II.
4. After reviewing the submissions and documents, the Authority determined that the term "All diagnostic kits and reagents" in Schedule II does not cover laboratory reagents. They differentiated between diagnostic and laboratory reagents, concluding that laboratory reagents imported and supplied by the applicant do not fall under the specified category.
5. The ruling stated that laboratory reagents are classified as "Goods which are not specified in Schedule I, II, IV, V or VI" under Schedule III of the CGST Notification, contradicting the applicant's classification argument. The decision was made based on the interpretation of the specific language used in the notifications.

Overall, the judgment clarified the classification of laboratory reagents under the GST Tariff, emphasizing the importance of specific descriptions and interpretations of the relevant schedules in the notifications.