2023 (2) TMI 1262 - AAR - GST

Classification of goods - rate of GST - Teicoplannin - Caspofungin - HELD THAT - These goods are taxable at the rate of 2.5% CGST 2.5% of SGST further the commodity name is enumerated in the lists appended to this schedule. The commodities regarding which the clarification sort are enumerated in this list as follows 1. Capsofungin acetate - Sl.No. 130 in List 1 to Schedule-I. 2. Teicoplanin - Sl.No. 216 in List 1 to Schedule-I. Thus, the above two (2) commodities are taxable at the rate of 2.5% CGST 2.5% of SGST.

Summary

Issues:
1. Application for Advance Ruling under Section 97(1) of TGST Act, 2017.
2. Determination of tax liability on specific pharmaceutical products.

Analysis:
1. The applicant, a pharmaceutical company, filed an application seeking an Advance Ruling under Section 97(1) of the TGST Act, 2017, regarding the tax rate applicable to two specific products, Teicoplanin and Caspofungin. The application was admitted after verifying the payment of the requisite fee and ensuring that the questions raised were not previously decided or pending before any authority.

2. The applicant, M/s. Stanex Drugs & Chemicals Private Limited, is engaged in the manufacturing of pharmaceutical formulations like small value parental products. The company sought clarification on the tax rates for Teicoplanin and Caspofungin, as these products are classified under HSN codes 3002 and 3004 and are taxable at either 5% or 12% under specific entries in the tax notification.

3. During the personal hearing, the authorized representatives of the company reiterated their case and confirmed that there were no pending or decided proceedings related to the tax liability of the mentioned products. The discussion focused on the classification of drugs and medicines under Schedule-I of Notification 1/2017 dated 28.06.2017, which specified the tax rates for such commodities.

4. The Authority for Advance Ruling examined the relevant provisions and found that Teicoplanin and Caspofungin are listed under specific entries in Schedule-I, attracting a tax rate of 2.5% CGST and 2.5% SGST. The ruling clarified that both products are taxable at this rate, providing a definitive answer to the questions raised by the applicant regarding the tax liability on these pharmaceutical items.

5. Consequently, the ruling confirmed that the tax rate applicable to Capsofungin acetate and Teicoplanin is 2.5% CGST and 2.5% SGST, as per the provisions of the GST Acts. The detailed analysis considered the specific classification of these products under the tax notification and provided a clear ruling on the tax liability for the pharmaceutical company, resolving the uncertainty regarding the applicable tax rates for the mentioned products.