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Issues: (i) Whether the Micro Manipulator System is classifiable under Chapter Heading 9018 or Chapter Heading 9011 of the First Schedule to the Customs Tariff Act, 1975; (ii) what rate of Goods and Services Tax applies to the Micro Manipulator System if it falls under Chapter Heading 9018.
Issue (i): Whether the Micro Manipulator System is classifiable under Chapter Heading 9018 or Chapter Heading 9011 of the First Schedule to the Customs Tariff Act, 1975.
Analysis: Chapter Heading 9011 covers compound optical microscopes, including surgical microscopes, whereas Chapter Heading 9018 covers instruments and appliances used in medical, surgical, dental or veterinary sciences. The product was found to be a medical device used for ICSI procedures in IVF and ART, with the microscope being only one component used as a visual aid. The principal function of the system was held to be medical use in assisted reproductive procedures, and the system was not excluded from Heading 9018 merely because it incorporated a microscope. The classification principle under Rule 2(a) of the General Rules for the Interpretation of the Customs Tariff Act, 1975 also supported classification of the complete system even if supplied unassembled or disassembled.
Conclusion: The Micro Manipulator System is classifiable under Chapter Heading 9018 and not under Chapter Heading 9011.
Issue (ii): What rate of Goods and Services Tax applies to the Micro Manipulator System if it falls under Chapter Heading 9018.
Analysis: Goods falling under Chapter Heading 9018 were held to attract the rate prescribed for medical instruments and appliances under the relevant GST notifications. Since the product was classified under Heading 9018, the applicable rate followed the rate specified for that entry in the notifications governing central and state tax.
Conclusion: The Micro Manipulator System is chargeable to GST at 12%.
Final Conclusion: The advance ruling was modified in the assessee's favour by holding the product classifiable under Heading 9018 with the corresponding GST rate applicable to that heading.
Ratio Decidendi: A complete medical system used principally for assisted reproductive procedures is classified by its essential function as a medical instrument or appliance under Heading 9018, and the presence of a microscope as one component does not shift it to Heading 9011.
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