TaxTMI 
TaxTMI 
2008 (6) TMI 628
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....x Act (KGST Act for short). The assessee had filed its annual returns conceding a particular total and taxable turn over for the assessment years 1997-98, 1998-99 and 1999-2000. Apart from others, the assessee had effected sales of GLA-120 Capsules (Gamma Linolenic Acid) and in the returns filed had requested the assessing authority to treat the sales of GLA-120 as an unclassified item and liable to tax only at the rate of 12.5%. The assessing authority after rejecting the returns filed has completed the best judgment; treating the commodity in question as food supplement/food preparation in the form of capsule just like Bournvitta, Horlicks which are taxable at 20% under Entry No. 87 of First Schedule to KGST Act. 3. The first appellate....
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....ssed by the Tribunal is before us in these Tax Revision Petitions filed under Section 41 of the KGST Act. The questions of law framed are as under: "(i) Did not the Tribunal and the authorities below committed error in law in holding that the item in question 'GLA-120' namely soft gelatin capsule containing Gamma Linonelic Acid 120 mg as item similar to the items enumerated in Entry 124 and thereafter 141 of the First Schedule to the General Sales Tax Act, namely, 'non alcoholic drinks, squashes, sauces, aerated water, mineral water, beverages, glucose D, glucovita and similar items whether bottled, canned or packed ? (ii) Whether the item in question is only a dietary supplement sold in the form of....
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....n. 8. The product manual/literature provides the contents of GLA-120 which is sold in capsule form. It contains Gamma Linolenic Acid which is a type of fatty acid found in oils. GLA-120 capsule is supposed to help in nerve growth/functioning. It is particularly promoted for diabetic neuropathy. Having seen the literature/product manual of GLA-120 and the purpose for which it is used, let us come back to the entries in the First Schedule to the KGST Act. According to the assessing authority, it would fall under the Entry No. 87 of the First Schedule to the KGST Act. The said Entry reads as under: "Sl.No. Description of Goods Point of Levy (percent) 87. Non-alcoholic drinks, squashes sauces, aerated waters, mineral ....
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....n food like Glucose and Glucovita etc. The commodity is also prescribed for the cure of the above disease or disorders. This is not commonly used as in the case of Glucose and Glucovita which have no specific entry in the schedule. Therefore it is to be taxed including data residual entry of the schedule to the Act." 12. The word medicine means, any substance/chemical which when used in a disease will lead to cure or improvement. The dietary supplement means any substance (usually a food item/ingredient) which helps in maintenance of health. The clear distinction between health and disease is not there. What is healthy for a particular person/sex/ethnic group is a disease for some one else (for example being slim is healthy for a model b....