Medical Micro Manipulator System Classified under GST Chapter 9018

The judgment classified the Micro Manipulator System (MM System) under Chapter Heading 9018 of the Customs Tariff Act, 1975, as it is primarily used in medical procedures. As a result, the MM System is subject to a Goods and Services Tax (GST) rate of 12% (CGST 6% + SGST 6%). The ruling of the Gujarat Authority for Advance Ruling (GAAR) was adjusted to reflect this classification.

---

---

Issues Involved:
1. Determination of the correct classification of the product Micro Manipulator System (MM System).
2. Determination of the Goods and Services Tax applicable on the MM System.

Comprehensive, Issue-Wise Detailed Analysis:

Classification of Goods:
1. Appellant's Submission:
- The appellant classified the MM System under Chapter Heading 9018 of the Customs Tariff Act, 1975 (CTA, 1975), arguing it is an instrument used in medical science for procedures like Intracytoplasmic Sperm Injection (ICSI) and Assisted Reproductive Technology (ART).
- The MM System is described as a device used to interact with samples under a microscope with precision, consisting of components such as an input joystick and an output section for holding micro-tools.

2. GAAR's Ruling:
- GAAR classified the MM System under Chapter Heading 9011, considering it a surgical microscope essential for IVF procedures.

3. Appellant's Arguments Against GAAR's Ruling:
- The appellant contended that GAAR did not consider the functionality tests under HSN 9018 and relied solely on the absence of a specific mention of the MM System in the heading.
- The primary function of the MM System is to carry out the ICSI procedure, with the microscope serving only as a visual aid, not the main function.
- Reference was made to Chapter Note 3 of Chapter 9 and Notes 3 and 4 to Section XVI, emphasizing that the principal function of the MM System is medical and not magnification.

4. Explanatory Notes and Competing Chapter Headings:
- Chapter Heading 9011 covers compound optical microscopes used for various purposes, including surgical microscopes.
- Chapter Heading 9018 covers a wide range of medical instruments and appliances, explicitly excluding microscopes of heading 9011 or 9012 but including instruments equipped with optical devices.

5. Detailed Analysis:
- The MM System, used in ICSI and IVF procedures, consists of multiple components, including an inverted microscope, micromanipulators, microinjectors, and other elements necessary for precise medical procedures.
- Letters from various organizations and professionals confirmed the medical use of the MM System, emphasizing its role in ART and ICSI procedures.
- The Explanatory Notes for Chapter Heading 9018 indicate that instruments used exclusively in professional medical practice, equipped with optical devices, fall under this heading.

6. Conclusion on Classification:
- The MM System is appropriately classifiable under Chapter Heading 9018 of the CTA, 1975, as it is primarily used in medical procedures and the microscope is merely an aiding component.
- This classification holds even if the MM System is supplied in unassembled or disassembled form, as per Rule 2(a) of the General Rules for the interpretation of the CTA, 1975.

Determination of Goods and Services Tax:
1. Applicable GST Rate:
- As per Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, instruments and appliances used in medical sciences falling under Chapter Heading 9018 attract a GST rate of 12% (CGST 6% + SGST 6%).

2. Final Decision:
- The Advance Ruling No. GUJ/GAAR/R/22/2020 dated 02.07.2020 is modified to classify the MM System under Chapter Heading 9018.
- The MM System supplied by the appellant is chargeable to 12% GST as per the relevant notifications.

Summary:
The judgment determined that the Micro Manipulator System (MM System) used in medical procedures like ICSI and ART is classifiable under Chapter Heading 9018 of the Customs Tariff Act, 1975. Consequently, the applicable Goods and Services Tax (GST) rate for the MM System is 12% (CGST 6% + SGST 6%). The ruling by the Gujarat Authority for Advance Ruling (GAAR) was modified accordingly.

---