CRP Test Kit and Hb1Ac Test Kit classified under HSN 30.02 as agglutinating sera, not diagnostic kits under HSN 38.22

The AAAR Maharashtra ruled that CRP Test Kit and Hb1Ac Test Kit are classifiable under HSN Code 30.02 as agglutinating sera rather than under HSN Code 38.22 as diagnostic kits. The authority determined that antisera coated on latex particles constitute the essential component of both kits, which function through agglutination principles for medical diagnosis. Since the products contain mice antisera and operate on agglutination, they fall under Chapter 30.02, which is the default entry for diagnostic kits. Both products attract GST at 5% under Schedule-I entry 180 of Notification No.1/2017-Central Tax (Rate).

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Issues Involved:

1. Classification of CRP Test Kit and HbA1c Test Kit.
2. Applicable GST rate for CRP Test Kit and HbA1c Test Kit.

Detailed Analysis:

1. Classification of CRP Test Kit and HbA1c Test Kit:

CRP Test Kit:
- Product Description: CRP Test Kit, branded as "Infinite," is used for the quantitative determination of C-Reactive Protein (CRP) in human serum for medical diagnosis of inflammation and infections. It contains Buffer Reagent (R1), Latex Reagent (R2), and Calibrator Lyoph Serum Vial (R3).
- Principle: The kit works on the agglutination principle where latex particles coated with specific anti-human CRP react with CRP in the sample, causing agglutination detectable by a spectrophotometer.
- Essential Component: The essential component is R2 (latex particles coated with specific anti-human CRP), which constitutes around 85% of the total cost and is crucial for the test's specificity.

HbA1c Test Kit:
- Product Description: HbA1c Test Kit, branded as "Infinite" or "Auto Pure," is used for quantitative determination of hemoglobin A1c (HbA1c) in human blood and monitoring glycemic control in diabetic patients. It contains Latex reagent (R1), Buffered antibody reagent (R2), Hemolysis Reagent (R3), and an optional Calibrator (R4).
- Principle: The kit works on the agglutination principle by antigen-antibody interaction to determine HbA1c concentration.
- Essential Component: The essential component is R2 (Mouse anti-human HbA1c monoclonal antibody & Goat anti-mouse IgG polyclonal antibody), which constitutes around 75% of the total cost and is crucial for the test's specificity.

Advance Ruling by MAAR:
- MAAR ruled that both CRP and HbA1c kits do not fall under HSN code 3002 but under HSN code 3822 as "diagnostic kits and reagents," attracting GST @ 12%.

Appellant's Grounds of Appeal:
- The appellant argued that both kits should be classified under Chapter Sub-Heading 3002 as "Agglutinating Sera," citing the essential character given by antisera components.
- They referenced Explanatory Notes to the Harmonized Commodity Description and Coding System of CSH 3002 and judicial precedents, including the Supreme Court judgment in Span Diagnostics Ltd. Vs. CCE, which held that diagnostic kits with essential components classifiable under CSH 3002 should be classified under CSH 3002.

Appellate Authority's Findings:
- CRP Test Kit: The essential component, R2, is antisera derived from mice, which falls under CSH 3002. The kit works on agglutination, a common reaction in diagnostic kits classified under CSH 3002.
- HbA1c Test Kit: Similar to the CRP Test Kit, the essential component, R2, is antisera derived from mouse and goat, falling under CSH 3002. The kit also works on agglutination.

2. Applicable GST Rate for CRP Test Kit and HbA1c Test Kit:

Appellate Authority's Decision:
- Both CRP Test Kit and HbA1c Test Kit are classified under Chapter Heading 3002.
- As per entry at SI. No. 180 of Schedule I to Notification No. 01/2017-C.T. (Rate) dated 28.06.2017, read with entry at SI. No. 125 of List I appended to Schedule I, the applicable GST rate is 5% (CGST @ 2.5% + SGST @ 2.5%).

Conclusion:
- The appeal was allowed, setting aside the MAAR order. Both CRP Test Kit and HbA1c Test Kit are classified under Chapter Heading 3002 and attract GST at the rate of 5%.

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