Concessional GST entry for finished injectable product does not extend to bulk raw material used in later manufacture.

Micafungin Sodium in bulk drug form was held not to fall within the concessional GST entry for Micafungin Sodium for Injection under Serial No. 114 of Entry No. 180 of Schedule I to Notification No. 1/2017-Central Tax (Rate). The ruling turned on the distinction between a finished injectable product and a raw material supplied for further manufacture: the applicant's supply was only bulk Micafungin Sodium, not a ready-to-administer injection. The fact that downstream buyers used it to make injectable formulations did not expand the notification to cover the bulk drug. Accordingly, the 5% GST concession was unavailable.

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Issues: Whether the sale of Micafungin Sodium by the DTA unit was covered by Serial No. 114 of Entry No. 180 of Schedule I to Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 so as to attract GST at 5%.

Analysis: The concessional entry referred to Micafungin Sodium for Injection, which denotes a finished product ready for administration by injection. The product supplied by the applicant was only Micafungin Sodium in bulk drug form, supplied to customers as a raw material for further manufacture of formulations or vials. The fact that the downstream users may employ it in making an injectable product did not convert the applicant's supply into the notified goods. The exemption or concessional rate entry could not be expanded to cover bulk drug/raw material when the notification did not say so.

Conclusion: The bulk drug Micafungin Sodium sold by the applicant was not covered by Serial No. 114 of Entry No. 180 of Schedule I to Notification No. 1/2017-Central Tax (Rate), and the concessional 5% GST was not available.

Ratio Decidendi: A concessional tax entry for a specified finished product cannot be extended to its bulk raw material merely because the raw material is used to manufacture the notified product.

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