2018 (6) TMI 460 - AAR - GST

Determination of rate of tax - pharmaceutical products (i.e. Bulk drugs and Intermediates) - EFAVIRENZ, EMTRICITABINE, SUNTINIB MALATE, RALTEGRAVIR POTASIUM, LATANOPROST - Whether the applicant is eligible to claim the benefit of lower rate of GST i.e., 5% under SI. No. 180 of Schedule-I of the rate schedule under N/N. 01/2017- Central Tax(Rate) dated 28.06.2017 read with the corrigendum dated 30.06.2017 on supply of I EFAVIRENZ, EMTRICITABINE, SUNTINIB MALATE, RALTEGRAVIR POTASIUM, LATANOPROST, which also falls under SI. No. 40 of Schedule III? Held that - The products manufactured by the applicant, even though are bulk drug gets squarely covered under List 1 of SI. No. 180 of the Schedule -I to the N/N. 01/2017 Central Tax (Rate) dated 28.06.2017. Further as it is settled law that, the specific entry overrides the general entry, the commodities dealt by the applicant are covered by specific entries, the rate of tax applicable, is the rate specified against specific entry only. Ruling - The applicant is eligible to claim the benefit of lower rate of GST i.e., 5% under SI. No. 180 of Schedule-I of the rate schedule under Notification No. 01/2017-Central Tax(Rate) dated 28.06.2017 read with the corrigendum dated 30.06.2017 on supply of I. EFAVIRENZ 2. EMTRICITABINE 3. SUNTINIB MALATE 4. RALTEGRAVIR POTASIUM 5. LATANOPROST.

Summary

Issues:
- Determination of the rate of tax on pharmaceutical products manufactured by the applicant.
- Eligibility to claim the benefit of a lower GST rate under specific entries in the tax schedule.

Analysis:
- The applicant, engaged in manufacturing pharmaceutical products, sought an advance ruling on the rate of tax for products such as EFAVIRENZ, EMTRICITABINE, SUNTINIB MALATE, RALTEGRAVIR POTASIUM, and LATANOPROST under specific entries in the tax schedule.
- The applicant contended that since the products fell under List 1 of SI. No. 180 of Schedule I, they should benefit from the lower GST rate of 5% as per Notification No. 01/2017-Central Tax(Rate).
- The Authority reviewed the relevant entries in Schedule I and Schedule III of the tax notification. It was observed that the products manufactured by the applicant were covered under List 1 of SI. No. 180 of Schedule I, which specified a 5% tax rate for drugs or medicines.
- The Authority noted that specific entries override general entries in tax schedules. Therefore, since the applicant's products were covered by specific entries, they were entitled to the lower tax rate specified against those specific entries.
- Consequently, the ruling was passed in favor of the applicant, confirming their eligibility to claim the benefit of the lower GST rate of 5% for the mentioned pharmaceutical products under the relevant tax schedule entries.

This judgment clarifies the eligibility of a pharmaceutical manufacturer to avail a lower GST rate for specific products based on the entries in the tax schedule. It emphasizes the importance of specific entries overriding general entries in determining the applicable tax rate for goods.