Nutrition supplements correctly classified under 18% IGST rate, not 28% as claimed by Revenue

CESTAT Ahmedabad ruled in favor of appellant regarding IGST classification of nutrition/dietary supplements. The tribunal held that goods fell under Serial No. 453 and/or 23 of Schedule III attracting 18% IGST, not Serial No. 9 of Schedule IV with 28% rate as claimed by Revenue. The court found that Serial No. 9 covers only specific items and doesn't apply to appellant's goods under tariff item 21069099. Following precedent in Neuvera Wellness case, the tribunal determined appellant correctly declared goods at 18% IGST rate. The impugned order was set aside and appeal allowed.

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Issues Involved:
1. Classification of Nutrition/Dietary Supplements under IGST Notification.
2. Correct IGST rate applicable.
3. Validity of demand for differential IGST and associated penalties.

Summary:

1. Classification of Nutrition/Dietary Supplements under IGST Notification:
The primary issue for consideration was whether the appellant's goods, i.e., Nutrition/Dietary Supplements classified under Tariff item 21069099, attract IGST at the rate of 18% under serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017-Integrated Tax (Rate) dated 28-06-2017, as claimed by the appellant, or under serial No. 9 of Schedule IV, which provides for IGST at the rate of 28%, as claimed by the Revenue.

2. Correct IGST rate applicable:
The appellant argued that their goods are covered under serial No. 453 and/or 23 of Schedule III, attracting 18% IGST, while the Revenue contended that the goods fall under serial No. 9 of Schedule IV, attracting 28% IGST. The Tribunal found that the description under serial No. 9 of Schedule IV covers only specific items, and the appellant's goods do not fall under this category. Therefore, the goods are correctly classified under serial No. 453 and/or 23 of Schedule III, attracting 18% IGST.

3. Validity of demand for differential IGST and associated penalties:
The Tribunal referenced a similar case (Neuvera Wellness Pvt. Ltd) and concluded that the goods in question do not fall under serial No. 9 of Schedule IV but under serial No. 453 of Schedule III. The Tribunal also found that the demand for differential IGST was time-barred, as the show cause notice was issued long after the physical assessment of the bill of entry. Consequently, the demand for differential IGST and associated penalties was not sustainable.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal and confirming that the correct IGST rate for the appellant's goods is 18% under serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017-Integrated Tax (Rate). The demand for differential IGST and associated penalties was deemed unsustainable and time-barred.

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