2021 (10) TMI 627 - AAR - GST

Classification of goods - rate of GST - HSN code - Turbilatex C-reactive protein (CRP) infinite - HbA1c infinite - Applicability of N/N. 05/2021-Central Tax (Rate) New Delhi, the 14th June, 2021 G.S.R (E) - HELD THAT - The subject goods are not agglutinating sera by themselves. Rather they are diagnostic kits which may work on the principle of 'agglutinating sera'. The applicant has not helped their own case in as much as they have sought to reclassify their product from HSN Code 38.22 (which is used by them presently) to HSN Code 30.02 not on the basis of any actual evidence but only because some of their competitors are clearing similar goods under HSN Code 30.02. Diagnostic kits are classified here when the essential character of the kit is given by any of the products of this heading. Common reactions occurring in the use of such kits include agglutination, precipitation, neutralization, binding of complement, haemagglutination, enzyme-linked immunosorbent assay (ELISA), etc. The essential character is given by that single component which governs to the greatest extent the specificity of the test procedure - the subject product cannot be covered under Heading 30.02 of the GST Tariff as contented by the applicant. Whether the subject product can be covered under Heading 38.22 of the GST Tariff? - HELD THAT - The reagents of heading 38.22 may also be put up in the form of kits, consisting of other components, even if one or more components when presented separately, would be classifiable under another heading. Examples of such include kits used for testing glucose in blood, etc. - the subject goods are covered under Heading 38.22 of the GST Tariff. Applicability of N/N. 05/2021-Central Tax (Rate) New Delhi, the 14th June, 2021 G.S.R (E) - HELD THAT - It is seen from Sr. No. 18 of the said notification that the GST rate on Ambulances was reduced from 28% to 12%. Similarly as per Sr. No. 7, the GST rate on certain products, including CRP (C-Reactive Protein), falling under Heading 38.22 has been reduced to 5%. It is clear from the said notification that the rate of GST on CRP (C-Reactive Protein) was reduced to 5% for that particular period only else the rate is higher at 12%. The subject goods are covered under Schedule II Serial No.80 heading 3822 of Notification No.1/2017-Central Tax (Rate), dated 28th June, 2017, as amended attracting GST @ 12%.

Summary

Issues Involved:
1. HSN Classification and GST rate for Turbilatex C-reactive protein (CRP) infinite.
2. HSN Classification and GST rate for HbA1c infinite.

Issue-wise Detailed Analysis:

1. HSN Classification and GST rate for Turbilatex C-reactive protein (CRP) infinite:
The applicant, M/s Accurex Biomedical Private Limited, sought an advance ruling on the classification and GST rate applicable to their product, Turbilatex C-reactive protein (CRP) infinite. The applicant contended that CRP should be classified under Chapter 30, specifically under heading 3002, as it works on the principle of "Agglutinating Sera," and should be taxed at a CGST rate of 2.5%.

The jurisdictional officer argued that the product should fall under Chapter Heading 3822, attracting a GST rate of 12%. The officer cited the pre-GST period taxation and comparison with other suppliers who levy 12% GST on similar products. The officer also referenced the GST council's decision to reduce the GST rate on diagnostic kits and reagents from 18% to 12%.

Upon review, the authority observed that "Agglutinating Sera" listed under Sr. No. 125 of List 1 of Schedule I does not mention diagnostic kits explicitly. The product, CRP, is not an agglutinating sera by itself but a diagnostic kit working on its principle. The authority concluded that CRP does not fall under Heading 3002 but under Heading 3822, as it is a prepared diagnostic reagent used for in vitro applications. Thus, CRP should be classified under Heading 3822 and attract a GST rate of 12%.

2. HSN Classification and GST rate for HbA1c infinite:
Similarly, the applicant sought an advance ruling on the classification and GST rate for HbA1c infinite. The applicant argued that HbA1c should also be classified under Chapter 30, specifically under heading 3002, due to its working principle of "Agglutinating Sera," and should be taxed at a CGST rate of 2.5%.

The jurisdictional officer maintained that HbA1c should be classified under Chapter Heading 3822, attracting a GST rate of 12%. The officer noted that HbA1c is used for monitoring glycemic control in diabetic patients and is based on the agglutination principle by antigen-antibody interaction.

The authority reviewed the submissions and found that HbA1c is not an agglutinating sera by itself but a diagnostic kit working on its principle. The product does not fall under Heading 3002 but under Heading 3822, as it is a prepared diagnostic reagent used for in vitro applications. Therefore, HbA1c should be classified under Heading 3822 and attract a GST rate of 12%.

Conclusion:
The authority concluded that both Turbilatex C-reactive protein (CRP) infinite and HbA1c infinite are classifiable under Heading 3822 and under Sr.No 80 of Schedule II of Notification No.1/2017-Central Tax (Rate), dated 28th June 2017, attracting GST at 12% (6% each of CGST and SGST/UTGST or 12% IGST).