Concessional GST for medicines applies only to goods that are themselves medicines, not bulk drug intermediates.

GST concessional treatment under Entry 180 of Schedule I applies only to goods that are themselves medicines or drugs used for diagnosis, treatment, mitigation, or prevention of disease. Applying the meaning of "medicine" and "drug" from the Drugs and Cosmetics Act, 1940 and ordinary usage, the Gujarat AAR held that alpha-ketoanalogue calcium salts and other bulk drug intermediates are raw materials or active pharmaceutical ingredients, not products capable of direct administration as medicines. They therefore do not qualify for the 5% concessional rate and, where classified under HSN 2919, attract GST at 18%.

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Issues: Whether the applicant's products, being alpha-ketoanalogue calcium salts and other bulk drug intermediates, are classifiable under HSN 2919 and eligible for concessional GST at 5% under Entry 180 of Schedule I to Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017, or whether they are taxable at 18%.

Analysis: The products were examined in the light of Entry 180 of Schedule I, which applies to drugs or medicines, including their salts and esters, specified in List I. Since the CGST Act does not define "medicine" or "drug", the meaning in the Drugs and Cosmetics Act, 1940 and the ordinary, popular understanding of the term were applied. On that basis, the relevant test was whether the goods are themselves medicines used for diagnosis, treatment, mitigation, or prevention of disease, rather than raw materials or intermediates. The products supplied by the applicant were found to be bulk drugs or intermediates and not goods capable of direct administration as medicines. The reasoning further treated bulk drugs as raw material or active pharmaceutical ingredients and held that the concessional entry did not extend to such goods. For goods classifiable under HSN 2919, the applicable tariff entry was held to attract GST at 18%.

Conclusion: The applicant's products are classifiable under HSN 2919 and are not eligible for the 5% concessional rate; GST is payable at 18%.

Ratio Decidendi: Concessional GST entries for drugs or medicines apply only to goods that are themselves medicines used for diagnosis, treatment, mitigation, or prevention of disease, and not to bulk drugs or intermediates functioning as raw material or active pharmaceutical ingredients.

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