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2022 (3) TMI 1300 - AAR - GSTClassification of goods - rate of GST - women wellness products - Cramp comfort - to be classified under Chapter Heading 3004 attracting 12% GST under serial no. 63 or Chapter Heading 3005 attracting 12% GST - Applicability of serial no. 64 in Schedule II of Notification 01/2017 - Central Tax (Rate) dated 28 June 2017 and under Serial No 63 or 64 of Schedule II of Notification G.O. (Ms) No. 62 (NO.II(2)/CTR/532(D-4)/2017) TNGST (Rate), dated 29.06.2017 - HELD THAT - The applicant in August 2020, launched Cramp Comfort , which is a heat patch used by women during period pain. They claim that the product has prophylactic uses and is used as an alternative therapy to manage their menstrual discomfort/ secondary dysmenorrhea. In the instant case, the applicant s product Cramp Comfort works by self-heating and for pain relief during the menstrual cycle for women. The product just relieves the pain in the abdomen caused due to menstrual cycle. From the submissions of the applicant, it is seen that the active ingredients used in the product are Water absorber, Iron Powder, Activated charcoal, Vermiculite, Sodium chloride in specified doses, though the dosages of the components are not certified by any controlling agencies. The applicant has contended that product is for dysmenorrhea as a therapeutic use and the word Medicament should not have restricted meaning but include products for Therapeutic/Prophylactic use. There are many products which are naturally occurring and have therapeutic or prophylactic properties, when used in proper proportions and for particular time periods. The products like neem, turmeric, garlic etc.. all have medicinal value but the same is not considered as medicaments, when they are used as such, without subjecting to any chemical modification. Therefore, merely because a product possesses certain natural therapeutic/prophylactic properties, it cannot be said to fall under the classification of medicaments. In the case at hand, it is not established that the product has been classified as a device specified by the Central Government in any notification and therefore reliance on Section 3(b)(iv), to claim that the product is a Medicament do not help them. It is further seen that the applicant claims the product to be a drug as per Section 3(b) (i), considering the material part of the said section to be substances intended to be used for or in the treatment . It is their claim that the predominant use of the product is to alleviate the pain in the abdomen caused due to Dysmenorrhea and therefore to be considered as a drug - it is evident that the substances intended to be used for treatment of a disorder is a drug as per this provision. In the case at hand, the treatment for secondary dysmenorrhea are non-steroidal anti inflammatory drugs(NSAIDs) and the product helps only in reducing the pain and has not been established to be a recommended treatment for the disorder. It is seen that the product though not notified as a medical device as required Under Section 3(b)(iv) of Drugs and Cosmetics Act 1940, is still marketed as Self-heating Pain relief Patch and can be worn anywhere for alleviating the pain. Therefore, the product merits classification under CTH 3005 as the Customs Tariff is aligned with the HSN. Further, on perusal of the invoices furnished by the applicant, the applicant s product is currently classified under HSN 3005 which is evident from the invoice raised in November 2021. The product Comfort patch is to be classified under HSN 3005 and the applicable CGST is @6% as per serial Number 64 in schedule II of Notification 01/2017 -Central Tax (Rate) dated 28.06.2017 and applicable SGST is @ 6% as per Serial No. 64 of Schedule II of Notification G.O. (Ms) No.62 (No. II(2)/ctr/532(D-4)/2017) TNGST (Rate), dated 29.06.2017.
Issues Involved:
1. Classification of the product "Cramp Comfort patch" under Chapter Heading 3004 or 3005. 2. Determination of the appropriate GST rate for the product. Issue-wise Detailed Analysis: 1. Classification of the Product "Cramp Comfort Patch": Applicant's Argument: - The applicant, engaged in supplying various women's wellness products, including the "Cramp Comfort" heat patch used for period pain, sought classification under HSN 3004 or HSN 3005. - They argued that the product should be classified under HSN 3004 as it is used for therapeutic or prophylactic purposes, or under HSN 3005 as it is an adhesive patch with impregnated pharmaceutical substances. - The product consists of iron powder, activated carbon, vermiculite, salt, and water absorber, which emit heat upon contact with the atmosphere, providing relief from menstrual cramps. Authority's Analysis: - HSN 3004: - This heading covers medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale. - The product "Cramp Comfort" relieves pain but is not certified by any controlling agencies as a medicament. It is not established as a recommended treatment for dysmenorrhea. - The product does not qualify as a medicament under HSN 3004 as it is not recognized as a drug or device specified by the Central Government. - HSN 3005: - This heading covers wadding, gauze, bandages, and similar articles impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental, or veterinary purposes. - The product "Cramp Comfort" is a patch of non-woven fabric that emits heat to soothe and relax muscles during menstrual cramps, fitting the description of similar articles under HSN 3005. - The product is marketed as a self-heating pain relief patch and can be worn anywhere for alleviating pain, aligning with the classification under HSN 3005. 2. Determination of the Appropriate GST Rate: - Having decided the classification under HSN 3005, the applicable GST rate is determined based on the relevant notification. Applicable GST Rate: - The product "Cramp Comfort patch" falls under HSN 3005 and attracts a GST rate of 12% (6% CGST and 6% SGST) as per Serial No. 64 of Schedule II of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and Notification G.O. (Ms) No.62 (No. II(2)/CTR/532(D-4)/2017) TNGST (Rate) dated 29.06.2017. Ruling: - The product "Cramp Comfort patch" is to be classified under HSN 3005, attracting a CGST rate of 6% and an SGST rate of 6%, totaling 12% GST.
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