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2021 (1) TMI 373 - AAR - GSTClassification of goods - Urine collection bags - to be classified under HSN Code 90189099 or otherwise - whether covered under Serial No.E(8) of List 3 of Entry 257 of Schedule I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 issued under the Central Goods and Services Tax Act, 2017 and corresponding Notifications issued under the Gujarat Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017 OR under Serial No.218 of Schedule-II of the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 attracting GST rate of 12%. HELD THAT - The Urine Collection Bags manufactured and supplied by the applicant are instruments/appliances, which are used in medical sciences, are classificiable under heading 9018 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and appear at Entry No.218 of Schedule-II to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 on which GST liability is 12% (6% CGST 6% SGST). We also find that there is another entry i.e. Entry No.257 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 which covers Assistive devices, rehabilitation aids and other goods for disabled, specified in List 3 appended to this Schedule and the product Urine Collection Bag finds mention at Entry No.8 of List 3(E). The GST liability under the said entry is 5%(2.5% CGST and 2.5% SGST). We also find that Urine Collection Bag is an assistive device and that it would be covered under Entry No.257 of Schedule-I of the said notification, irrespective of the fact as to whether the said product is used for disabled people or otherwise. In this regard, since there are 2 separate entries available to the applicant falling under different Schedules of the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017. As per Rule 3 of the General Rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, the heading which provides the most specific description shall be preferred to headings providing a more general description - In this case, it is found that the entry No.257 of Schedule-I of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 provides a more specific description of the product manufactured and supplied by the applicant as there is a specific entry of Urine Collection Bag at Entry No.8 of List 3(E) appended to the said Schedule whereas the Entry No.218 in Schedule-II of aforementioned Notification provides only a general description i.e. instrument/appliance used in the medical sciences. Thus, the product Urine Collection Bags manufactured and supplied by the applicant fall under Entry No.257 of Schedule-I of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 and the GST liability on it is 5%.
Issues Involved:
1. Classification of Urine Collection Bags under GST. 2. Determination of applicable GST rate for Urine Collection Bags. Issue-wise Detailed Analysis: 1. Classification of Urine Collection Bags under GST: The applicant, M/s. Narendrakumar Manilal Patel (National Health Care), is engaged in manufacturing and trading Urine Collection Bags under HSN Code 90189099. They argued that these bags should be classified under Serial No. E(8) of List 3 of Entry 257 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, attracting a GST rate of 5%. Alternatively, a general entry at Serial No.218 of Schedule-II covers all instruments and appliances used in medical, surgical, dental, or veterinary sciences with a GST liability of 12%. The applicant provided extensive documentation, including doctors' opinions, invoices, a catalogue, and balance sheets, to support their claim. Doctors confirmed that Urine Collection Bags are assistive devices for bedridden patients, used to empty the bladder when patients cannot do so naturally. The Authority examined the classification under the Customs Tariff Act, 1975, and the relevant GST notifications. They confirmed that Urine Collection Bags fall under Sub-heading 90189099, which covers instruments and appliances used in medical sciences. This heading appears at Entry No.218 of Schedule-II of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, attracting a 12% GST rate. However, the applicant argued that the specific entry at Serial No. E(8) of List 3 of Entry 257 of Schedule-I, which mentions "Urine Collection Bags," should take precedence over the general entry. The Authority agreed, noting that Rule 3(a) of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975, states that the heading providing the most specific description should be preferred. 2. Determination of Applicable GST Rate for Urine Collection Bags: The Authority considered whether Urine Collection Bags should attract a GST rate of 5% under Entry No.257 of Schedule-I or 12% under Entry No.218 of Schedule-II. They reviewed the relevant GST notifications and the principles of classification. The Authority found that Entry No.257 of Schedule-I specifically mentions "Urine Collection Bags" under List 3(E), making it a more specific entry compared to the general entry at Serial No.218 of Schedule-II. Consequently, they concluded that the product should be classified under Entry No.257 of Schedule-I, attracting a GST rate of 5%. Ruling: The Authority ruled that the goods supplied by the applicant, M/s. Narendrakumar Manilal Patel (National Healthcare), are covered under Serial No. E(8) of List 3 of Entry 257 of Schedule I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, attracting a GST rate of 5%.
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