Medical device packaging sterilization reels and pouches classified under HSN 39239090 not Chapter 30

AAR Uttar Pradesh ruled that sterilization reels and pouches manufactured by an ISO-certified company for medical device packaging should be classified under Chapter 39 of CGST Tariff, specifically HSN code 39239090 (Others), attracting applicable GST rates. The authority determined these products are not for direct medical/surgical use but for institutional packaging purposes, ruling out classification under Chapter 30. The products fall under residual tariff item 39.23.90.90 rather than aseptic bags category 39.23.90.20, as they serve broader sterilization packaging functions beyond aseptic applications.

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Issues Involved:
1. Classification of goods and/or services.
2. Correct HSN code for Sterilization Reels and Pouches.
3. Applicable GST rate for Sterilization Reels and Pouches.

Summary:

1. Classification of Goods and/or Services:
The applicant, an ISO 13485, ISO 11607, and CE certified company, manufactures micro barrier sterilization reels and pouches used by medical devices companies, Pharmaceutical Industries, and Hospitals. The issue raised is admissible under Section 97(2)(a) of the CGST Act 2017.

2. Correct HSN Code for Sterilization Reels and Pouches:
The applicant sought clarification on whether their product falls under HSN Code 300590 (GST at 12%) or HSN Code 39239090 (GST at 18%). The product is not medical equipment but packing material that keeps medical equipment sterilized until use. According to the Customs Tariff Act, 1975, heading 30.05 includes items like wadding, gauze, bandages, etc., impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental, or veterinary purposes. The product does not meet these criteria as it is not for retail sale but for institutional use. Therefore, heading 30.05 is ruled out.

The product falls under heading 39.23, which covers articles for the conveyance or packing of goods, of plastics. The product is classified under sub-heading 39.23.90. The applicant's product, sterilization reels and pouches, is not limited to "Aseptic Bags" under Tariff item 39.23.90.20 but falls under the residual Tariff item "Others" of 39.23.90.90.

3. Applicable GST Rate for Sterilization Reels and Pouches:
The correct rate of GST for Sterilization Reels and Pouches under HSN code 39239090 is 18% (CGST @9% and SGST @9%).

Ruling:
1. The HSN code to be used for Sterilization Reels and Pouches is 39239090.
2. The correct rate of GST is 18% (CGST @9% and SGST @9%).

This ruling is valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh and subject to provisions under Section 103(2) of the CGST Act, 2017 until declared void under Section 104(1) of the Act.

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