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TMI Blog2021 (1) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... rugs given in Drugs and Cosmetics Act, 1940 (Central Act 23 of 1940). Clause (i) of Section 3(b) defines a drug as all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human being, or animals , including specified preparations. Thus, Sr. No. 180 of Schedule-I of Not. No. 01/2017-Ct (Rate) dated 28.06.2017, as amended, only such medicine and drugs are covered, which can be used for or in diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings - further, the term drugs as per DRUGS (PRICES CONTROL) ORDER, 1979 makes it clear that bulk drugs are raw material /ingredient of pharmaceutical and they are the Active Pharmaceutical Ingredients (i.e. API) of the medicine. In other words, it is the substance responsible for the product being a medicine. The bulk drug would inevitably remain the same as it is the identity of the medicine. When the bulk drug is absent, the product is no longer a medicine and when it is changed, it is a new medicine. Bulk dugs is not defined in GST, therefore, in common parlance we ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST ARA-01 discharging the fee of ₹ 5,000/- each under the CGST Act and the GGST Act. 2. M/s. Altis Finechem Pvt. Ltd. an applicant is engaged in the manufacture and supply of pharmaceutical products viz. Bulk Drugs and intermediates viz. Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt. 3. The applicant submitted that they supply their above product @18% but their customer stated that their product attract 5%. They requested to determine the tax liability of their product falling under HSN 2919. 4. Accordingly, applicant sought Advance Ruling on the following question : 1. Classification of goods and determination of tax liability of product under HSN 2919 of following goods : Calcium-3-methyl-2oxo-valerate (Alpha-Ketoanalogue Isoleucine Calcium Salt), Calcium-3-methyl-2oxobutyrate (Alpha-Ketoanalogue Valine Calcium Salt), Calcium-4-methyl-2oxo-valerate (Alpha-Ketoanalogue Leucine Calcium Salt), Calcium-DL-2-hydroxy-4(methylthio) butyrate (Alpha-Ketoanalogue Methionine Calcium Salt, Calcium -2 oxo-3-ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and eaters and diagnostic test kit, specified in List I appended to this Schedule 11. As per the above entry, Drugs or medicines including their salts and esters specified in List I appended to this Schedule are eligible for GST @5%. In CGST Act 2017, the terms "Medicine" or "Drugs" have not been defined. We consider the definition "Drugs" given in Drugs and Cosmetics Act, 1940 (Central Act 23 of 1940). Section 3(b) of the Drugs and Cosmetics Act, 1940 (Central Act 23 of 1940) defines a "drug" in the following terms: "(i) All medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings, or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes; Clause (i) of Section 3(b) defines a 'drug' as all medicines for internal or external use of human beings or animals and all substances "intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human being, or animals", including specified preparations. 12. In Ishwar Singh Bindra Vs. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object of the statute to suggest the contrary. Where a word has a secondary meaning, the assessment is whether the natural, ordinary or popular meaning flows from the context in which the word has been employed. 14. The word 'medicine' is defined in Black's Law Dictionary thus: "Medicine - the science and art dealing with the prevention, cure and alleviation of diseases; in a narrower sense that part of science and art of restoring and preserving health which is the province of the physician as distinguished from the surgeon and obstetrician." 14.1 Collins Dictionary for Advanced Learners defines 'medicine' thus: "Medicine is the treatment of illness and injuries by doctors and nurses; is a substance that you drink or swallow to cure an illness." 14.2 Cambridge Dictionary defines 'medicine' as: "A drug that is used to treat illness or injury; the science dealing with the preserving of health and with preventing and treating disease or injury." The ordinary or popular understanding of the term medicine or drugs is characterized by its curative properties in general and specifically, its use for or in diagnosis, treatment, mitigation or prevention of any disease or disorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial to the said customers. The applicant contention is that their bulk drug i.e. Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt is covered under the entry No. 180 of Not. No. 01/2017-CT (Rate) dated 28.06.2017 and eligible for concessional rate of GST. In the said entry No. 180 of said Notification word "Bulk Drugs" would have been included, had the intention of the Government been to extend the benefit of concessional rate to the bulk drugs/raw material. Therefore 5% GST is not applicable to the bulk drug Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt, in terms of List I to Entry No. 180 of Schedule I to the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. Further the applicant in his submission has stated that their product i.e. bulk drugs fall and intermediate under HSN 2919 and accordingly sought the ruling regarding rate of GST tax of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Tariff Act, 1975 (51of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification 21. The relevant entry No. 40 of Notification No. 01/2017-Ct (Rate) dated 28.06.2017 is read as under : SCHEDULE III - 9% S.No. Chapter/Heading/Sub-heading/Tariff item Description of Goods (1) (2) (3) 40. 29 All organic chemicals other than giberellic acid 21.1 In view of the entry No. 40 of Notification No. 01/2017-Ct (Rate) dated 28.06.2017 the goods viz. bulk drugs and intermediate i.e. Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt classifiable under HSN 2919 attract GST @ 18% { 9% CGST + 9% SGST}. 22. In view of the foregoing, we rule as follows : RULING Q.1. Classification of goods and determination of tax liability of product under HSN 2919 of following goods : Calcium-3-methyl-2oxo-valerate (Alpha-Ketoanalogue Isoleucine Calcium Salt), Calcium-3-methyl-2oxobutyrate (Alpha-Ketoanalogue Valine ..... 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