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2021 (7) TMI 536 - AAR - GSTClassification of goods - rate of GST - import as well as supply of Laboratory reagents for rapid testing of food safety parameters - applicability of Entry No. 80 in Schedule II to the N/N. 01/2017-Integrated Tax (Rate) dated 28-06-2017 (as amended) - Taxable at the rate of 12% or under Entry No. 453 to Schedule III, attracting a levy of integrated tax at the rate of 18%? - HELD THAT - The reagents referred to in Heading 3822 of the Customs Tariff includes both diagnostic and laboratory reagents. The Tariff Heading 3002 pertains to human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products and the Tariff Heading 3006 pertains to pharmaceutical goods specified in note 4 of chapter 30. Admittedly, the products supplied by the applicant are laboratory reagents which are predominantly used in food testing lab or in the field for testing of processed and unprocessed food. Hence, they do not fall under any of the sub - headings / tariff items under Heading 3002 or 3006 and therefore, they are appropriately classifiable under Customs Tariff Heading 3822 00 90. The description in the entry at SI No. 80 of Schedule II of Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017, is All diagnostic kits and reagents . Hence, it is evident that all reagents falling under Customs Tariff Heading 3822 are covered under the entry at SI No. 80 of Notification No. 01/2017 Integrated Tax (Rate) dated 28.06.2017. Thus, the laboratory reagents for rapid testing of foods safety parameters supplied by the applicant is appropriately classifiable under Customs Tariff Heading 3822 00 90 and is liable to GST at the rate of 12% as per entry at SI No. 80 of Schedule II of N/N. 01/2017 Integrated Tax (Rate) dated 28.06.2017.
Issues Involved:
1. Classification of laboratory reagents for rapid testing of food safety parameters. 2. Applicable rate of GST for the import and supply of these laboratory reagents. Issue-wise Detailed Analysis: 1. Classification of Laboratory Reagents for Rapid Testing of Food Safety Parameters: The applicant, M/s. Neogen Food and Animal Security (India) Private Ltd, sought clarity on whether their laboratory reagents should be classified under Tariff Item 3822 00 90 of the Customs Tariff Act. The laboratory reagents are used for testing processed and unprocessed foods, juices, cereals, nuts, spices, and various raw materials. The applicant argued that these reagents should be classified under Heading 3822, which covers "Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, other than those of heading 3002 or 3006; certified reference materials." The Hon’ble Karnataka Appellate Authority for Advance Ruling had previously ruled that reagents under Chapter Heading 3822 are covered under the entry at SI No. 80 of Notification No. 01/2017 Integrated Tax (Rate) dated 28.06.2017. The applicant relied on this precedent, asserting that their laboratory reagents fall under the specific entry at SI No. 80 of Schedule II, which covers "All diagnostic kits and reagents." 2. Applicable Rate of GST: The applicant sought clarity on whether the reagents should attract a GST rate of 12% under Entry No. 80 of Schedule II or 18% under the residuary Entry No. 453 of Schedule III of the Notification No. 01/2017-Integrated Tax (Rate) dated 28-06-2017. The applicant contended that the specific entry for laboratory reagents at SI No. 80 should take precedence over the general residuary entry at SI No. 453, which applies to goods not specified in other schedules. Discussion and Conclusion: The Authority for Advance Ruling examined the matter in detail, considering the classification principles under the Customs Tariff Act, 1975, and relevant judicial precedents. The General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975, were applied, emphasizing that specific entries should be preferred over general or residuary entries. The Authority noted that the laboratory reagents supplied by the applicant are appropriately classifiable under Customs Tariff Heading 3822 00 90, which includes diagnostic and laboratory reagents other than those of heading 3002 or 3006. The reagents in question do not fall under these headings and are therefore classified under Heading 3822. The entry at SI No. 80 of Schedule II of Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017 explicitly covers "All diagnostic kits and reagents" under Chapter Heading 3822. Consequently, the laboratory reagents for rapid testing of food safety parameters supplied by the applicant fall under this specific entry and attract a GST rate of 12%. Ruling: The laboratory reagents for rapid testing of food safety parameters supplied by the applicant are appropriately classifiable under Customs Tariff Heading 3822 00 90 and are liable to GST at the rate of 12% as per entry at SI No. 80 of Schedule II of Notification No. 01/2017 Integrated Tax (Rate) dated 28.06.2017.
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