Authority classifies Urine Collection Bags under specific GST entry, benefiting applicant.

The Authority ruled in favor of the applicant, M/s. Narendrakumar Manilal Patel (National Health Care), determining that Urine Collection Bags should be classified under Serial No. E(8) of List 3 of Entry 257 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, attracting a GST rate of 5%. This specific entry prevailed over the general entry at Serial No.218 of Schedule-II, resulting in a lower GST rate for the product.

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Issues Involved:
1. Classification of Urine Collection Bags under GST.
2. Determination of applicable GST rate for Urine Collection Bags.

Issue-wise Detailed Analysis:

1. Classification of Urine Collection Bags under GST:

The applicant, M/s. Narendrakumar Manilal Patel (National Health Care), is engaged in manufacturing and trading Urine Collection Bags under HSN Code 90189099. They argued that these bags should be classified under Serial No. E(8) of List 3 of Entry 257 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, attracting a GST rate of 5%. Alternatively, a general entry at Serial No.218 of Schedule-II covers all instruments and appliances used in medical, surgical, dental, or veterinary sciences with a GST liability of 12%.

The applicant provided extensive documentation, including doctors' opinions, invoices, a catalogue, and balance sheets, to support their claim. Doctors confirmed that Urine Collection Bags are assistive devices for bedridden patients, used to empty the bladder when patients cannot do so naturally.

The Authority examined the classification under the Customs Tariff Act, 1975, and the relevant GST notifications. They confirmed that Urine Collection Bags fall under Sub-heading 90189099, which covers instruments and appliances used in medical sciences. This heading appears at Entry No.218 of Schedule-II of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, attracting a 12% GST rate.

However, the applicant argued that the specific entry at Serial No. E(8) of List 3 of Entry 257 of Schedule-I, which mentions "Urine Collection Bags," should take precedence over the general entry. The Authority agreed, noting that Rule 3(a) of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975, states that the heading providing the most specific description should be preferred.

2. Determination of Applicable GST Rate for Urine Collection Bags:

The Authority considered whether Urine Collection Bags should attract a GST rate of 5% under Entry No.257 of Schedule-I or 12% under Entry No.218 of Schedule-II. They reviewed the relevant GST notifications and the principles of classification.

The Authority found that Entry No.257 of Schedule-I specifically mentions "Urine Collection Bags" under List 3(E), making it a more specific entry compared to the general entry at Serial No.218 of Schedule-II. Consequently, they concluded that the product should be classified under Entry No.257 of Schedule-I, attracting a GST rate of 5%.

Ruling:

The Authority ruled that the goods supplied by the applicant, M/s. Narendrakumar Manilal Patel (National Healthcare), are covered under Serial No. E(8) of List 3 of Entry 257 of Schedule I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, attracting a GST rate of 5%.

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