2018 (6) TMI 705 - AAR - GST

Classification of goods - implants for joint replacements - rate of tax - whether the products get covered under Serial No. E(9) of List 3 of Entry 257 of Schedule I of Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 5% or Serial No. 221 of Schedule II of the Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 12%? Held that - The implants for joint replacement is clearly and most specifically covered under Sl No. E(9) of List 3 of Entry 257 of Schedule I attracting 5%GST. Further, there is a similar entry under Sl No. 578 - List 30 Entry E(9) of Notification No. 5012017 - Customs dated 30.06.2017 where under the effective rate of Basic Customs Duty is Nil. On a plain reading of entry at Serial No. E(9) of List 3 of Entry 257 of Schedule I and entry at Serial No. 221 of Schedule II of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017, it is evident that joint replacements are specifically covered under the entry at Serial No. E(9) of List 3 of Entry 257 of Schedule I whereas the entry at Sl. No. 221 of Schedule II is a general entry that covers artificial parts of body. Therefore, applying the principle under Rule 3 of the General Rules of Interpretation of the First Schedule to the Customs Tariff Act, 1975; that the heading which provides the most specific description shall be preferred to headings providing a more general description we hold that the joint replacements falling under HSN Code 90213100 are covered under Serial No. E(9) of List 3 of Entry 257 of Schedule I of Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GSTat the rate of 5%. Ruling - The implants for joint replacements falling under HSN Code 90213100 are covered under Serial No. E(9) of List 3 of Entry 257 of Schedule I of Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 5%.

Issues:
Rate of tax on implants for joint replacements under GST.

Analysis:
1. The applicant, a retail dealer of implants for joint replacements, sought an Advance Ruling on the tax rate for commodities listed in the application.
2. The applicant argued that the listed items are implants for handicapped patients, specifically joint replacements, and should be taxed at 5% under Schedule I.
3. During a personal hearing, the applicant's representative highlighted that the products fall under HSN Code 90213100 and are covered under Serial No. E(9) of List 3 of Entry 257, attracting 5% GST.
4. The comparison was made with Serial No. 221 of Schedule II, which attracts 12% GST, covering a broader range of items like artificial body parts.
5. The classification for GST was determined by adopting the Customs Tariff Act, 1975, and its interpretative rules, ensuring consistency in levying GST.
6. Rule 3 of the General Rules for Interpretation of Import Tariff was applied, favoring the most specific description for classification, which led to the conclusion that joint replacements fall under Serial No. E(9) of List 3, attracting 5% GST.
7. The applicant provided invoices confirming the technical/trade names and HSN Codes of the products as implants for joint replacement.
8. Considering the submissions and evidence, the application was admitted for further review.
9. The final ruling concluded that implants for joint replacements under HSN Code 90213100 are covered under Serial No. E(9) of List 3 of Entry 257, attracting 5% GST.

Conclusion:
The judgment clarified that implants for joint replacements should be taxed at 5% under Serial No. E(9) of List 3 of Entry 257, Schedule I of the Central Tax (Rate) Notification, 2017.

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