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2021 (12) TMI 887 - AAR - GSTClassification of goods - import of diagnostic and laboratory reagents - to be classified under heading 3822 of the Customs Tariff Act, 1975 are covered under Entry No. 80 of Schedule H to the Notification No.1/ 2017-Integrated Tax (Rate) dated 28.06.2017? - Circular No. 163/ 19/2021-GST dated 6th October, 2021 - HELD THAT - The CBIC, vide para 10 of the Circular No. 163/ 19/2021-GST dated 6 th October, 2021, clarified the issue of whether the benefit of concessional rate of 12% would be available to laboratory agents and other goods falling under heading 3822 . It is held that the intention of the entry at S. No. 80 of Schedule II of notification No.1/2017- Integrated Tax (Rate) dated 28.6.2017 was to prescribe GST rate of 12% to all goods, whether diagnostic or laboratory regents, falling under heading 3822. Accordingly it is clarified that concessional GST rate of 12% is applicable on all goods falling under heading 3822, vide Entry at S. No. 80 of Schedule II of notification No.1/2017-Integrated Tax (Rate) dated 28.6.2017.
Issues Involved:
1. Classification of 'diagnostic and laboratory reagents' under the Customs Tariff Act, 1975. 2. Applicability of Entry No. 80 of Schedule II to Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017. 3. Determination of the correct GST rate for these reagents. Issue-wise Detailed Analysis: 1. Classification of 'diagnostic and laboratory reagents' under the Customs Tariff Act, 1975: The applicant is engaged in the business of importing and selling medical and laboratory instruments, laboratory reagents, and diagnostic reagents classified under tariff heading 3822. The applicant asserts that these reagents fall under Entry No. 80 of Schedule II to Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017, which prescribes a GST rate of 12%. 2. Applicability of Entry No. 80 of Schedule II to Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017: The applicant argues that Entry No. 80 of Schedule II covers all types of reagents classifiable under Chapter Heading 3822. The explanation provided in Notification No. 01/2017 clarifies that the heading under the Customs Tariff Act, 1975 is relevant for GST purposes as well. The applicant emphasizes that the heading 3822 is broad and encompasses both diagnostic and laboratory reagents without any bifurcation. The applicant also points out that the term "reagents" in Entry No. 80 is used in a conjunctive sense with "diagnostic kits," indicating that all reagents under heading 3822 should be covered. 3. Determination of the correct GST rate for these reagents: The applicant supports their view by citing various judicial precedents and legislative intent. They reference the Fitment Committee's recommendations, which suggested a 12% GST rate for all diagnostic and laboratory reagents under heading 3822. This recommendation was adopted in the 16th GST Council Meeting and reflected in the GST Rate Notification issued on 28 June 2017. The applicant also cites several rulings by Advance Ruling Authorities and the Karnataka Appellate Authority for Advance Ruling, which support their interpretation that all reagents under heading 3822 should be taxed at 12%. Findings and Discussion: The Authority for Advance Rulings examined the submissions and relevant facts. They noted that the CBIC issued Circular No. 163/19/2021-GST dated 6th October 2021, which clarified that the intention of Entry No. 80 of Schedule II of Notification No.1/2017-Integrated Tax (Rate) was to prescribe a 12% GST rate for all goods, whether diagnostic or laboratory reagents, falling under heading 3822. Ruling: The Authority concluded that the 'diagnostic and laboratory reagents' imported and supplied by the applicant, classified under heading 3822 of the Customs Tariff Act, 1975, are covered under Entry No. 80 of Schedule II to Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017. Therefore, these reagents attract a levy of Integrated Tax at the rate of 12%, as clarified in Circular No. 163/19/2021-GST dated 6th October 2021.
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