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2019 (8) TMI 281 - AAR - GSTClassification of goods - rate of GST - sales/supply of Wet Wipes - classified under Entry 235(CTH 9619) of Schedule II of the CGST Act 2017 or under the heading 3004? - HELD THAT - Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses and put up in measured doses or in form of tablets, ampoules, transdermal applications are classifiable under this CTH. They are meant to be taken into or absorbed the body through any of the above defined means In the case at hand, from the submissions of the applicant and the proforma invoice submitted by them it is seen that the product manufactured by them, Wet Wipes is a non-woven fabric impregnated with antibacterial (Chlorhexidine glutamate), moisturizing, cooling ingredients to help patients prophylactically and therapeutically. From the composition of ingredients submitted by the applicant, it is seen that the major ingredient used in the manufacture of wet wipes is Chlorhexidine Gluconate which is basically a disinfectant consists of about 2%. The wipes are used as a Sanitary towel to wipe the private parts of both (Male Female) who are bed ridden or old aged people. These ingredients are not meant to be absorbed to taken into the body but for wiping the skin. The ingredients are not 'medicaments under CTH 3004 or are the 'wet Wipes' which are non woven textiles impregnated with these ingredients. In the case at hand it is seen that in the products of the applicant, from the submissions that the Non-woven fabric is the medium used and the composition of the wipes are Chlorhexidine Gluconate, Glycerin, Menthol, Allantoin which undergoes a process in agitator and through Wetting and Folding machine made as 'Wet Wipes' and packed using the Packing machine and Carton Packing is done. They also perform the same function of antibacterial, moist rising, cooling effects to prevent infections, bed sores, rashes etc. though they may be meant for adults - it is beyond doubt that the product 'Wet Wipes' used to wipe the bed ridden and made of non-woven fabric impregnated with cosmetics and antibacterial agents is appropriately classifiable under CTH 3307 90 90 viz. other products (wadding, felt and nonwovens, impregnated, coated or covered with perfume or cosmetics). Hence, the product manufactured by the applicant is to be classified under Chapter Heading 3307 90 90. Applicable rate of tax - HELD THAT - The product in hand is classified under CTH 33079090 and as per Sl No 29 of Schedule IV of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and as per Sl No 29 of Schedule IV of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017, the applicable rate is 14% CGST and SGST upto 14.11.2017. This was amended by Notification No. 41/2017-C.T. (Rate) dated 14.11.2017 and G.O. (Ms) No.157, dated 14.1 1.2017, so that the rate applicable is 9% CGST and 9% SGST under Schedule Ill.
Issues Involved:
1. Classification of "Wet Wipes" under the appropriate tariff heading. 2. Applicable rate of tax on the supply of "Wet Wipes." Issue-wise Detailed Analysis: 1. Classification of "Wet Wipes" under the appropriate tariff heading: The applicant sought an advance ruling on the applicable rate of tax for "Wet Wipes" containing 2% Chlorhexidine Gluconate. The applicant argued that the product should be classified under CTH 3004, which pertains to medicaments for therapeutic or prophylactic uses. The product is intended for use as a sanitary towel for bedridden or elderly individuals to prevent bedsores and is sold exclusively in medical shops under a doctor's prescription. Upon examination, the ruling authority analyzed various chapter notes and headings from the Customs Tariff Act, 1975. The authority noted that Chapter 30 (CTH 3004) does not cover preparations of headings 3303 to 3307, even if they have therapeutic or prophylactic properties. The product in question, being a non-woven fabric impregnated with antibacterial and moisturizing agents, is not meant to be absorbed into the body but is used for wiping the skin. Therefore, it does not fit under CTH 3004. The ruling authority further examined CTH 9619, which covers sanitary towels, tampons, napkins, and similar articles. However, the "Wet Wipes" do not fit this category as they lack an absorbent core and an outer layer to prevent leakage. The CBIC Circular No. 52/26/2018-GST dated 09/08/2018 clarified that wipes made of spun lace non-woven fabric impregnated with perfumes or cosmetics fall under CTH 3307. The ruling authority concluded that the applicant's "Wet Wipes," made of non-woven fabric impregnated with antibacterial agents and other ingredients, should be classified under CTH 3307 90 90. 2. Applicable rate of tax on the supply of "Wet Wipes": The ruling authority determined that the product "Wet Wipes" falls under CTH 3307 90 90, which covers other products (wadding, felt, and nonwovens impregnated, coated, or covered with perfume or cosmetics). The applicable rate of tax for this classification was initially 14% CGST and 14% SGST as per Sl.No. 29 of Schedule IV of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and corresponding state notification, respectively, up to 14.11.2017. From 15.11.2017, the applicable tax rate was amended to 9% CGST and 9% SGST as per Sl.No. 60A of Schedule III of the amended notification. Ruling: 1. The product "Wet Wipes" supplied by the applicant is classifiable under CTH 3307 90 90 of the First Schedule to the Customs Tariff Act, 1975. 2. The applicable rate of tax is 14% CGST and 14% SGST up to 14.11.2017. From 15.11.2017, the applicable tax rate is 9% CGST and 9% SGST.
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