TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 141
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....o combat the situation arising on account of pandemic COVID - 19. Thus the applicant has sought advance ruling in respect of the following questions: a. What is the appropriate classification of Hand Sanitizer for the purpose of GST? b. What is the applicable rate of GST? 3. BRIEF FACTS OF THE CASE : a. The applicant is engaged in the manufacture of toilet soaps, LED bulbs and fittings, other toiletries, and other consumer products at their various factories. In relation to the said business, the Applicant has obtained registration under various laws and is in strict compliance of all such laws. b. The applicant herein is manufacturing and marketing Hand Sanitizer at a large scale primarily to combat the situation arising on account of pandemic COVID-19. c. Section 16 of the Drugs and Cosmetics Act, 1940 provides that 'standard quality' of drug would mean a drug which complies with standard set forth in Schedule II and the said schedule provides for Drugs included in the 'Indian Pharmacopoeia'. d. The Hand Sanitizer manufactured by the Applicant contains 95% v/v of ethyl alcohol, which is within the standard prescribed by the Indian Pharmacopoeia, the Appli....
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....person's appearance or beauty, whereas medicinal products are used to treat or cure some medical condition. A product that is used mainly in curing or treating ailments or diseases and contains curative ingredients even in small quantities, is to be branded as a medicament. j. The applicant submits that in light of the ratios set out in aforesaid case laws, it can be observed that if a product is used for preventing spread of disease, the same would be considered to be of prophylactic use qualifying as medicament. k. The applicant also submits that the World Health Organization has also specifically recognized the use of alcohol based hand rub for hand hygiene and this has been specifically stated in their publication "WHO Guidelines on Hand Hygiene in Health Care". l. The applicant submits that the Hand Sanitizer is manufactured and supplied by them under a valid drug license and is used for killing bacteria, as indicated on the packaging and also in the Indian Pharmacopoeia. It is considered to be anti-infective and hence the same would qualify as a product used for prophylactic use and in turn merits classification as a Medicament under Chapter 3004. m. The applicant sub....
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....itizers. Disinfectants are frequently used in hospitals, dental surgeries, kitchens, and bathrooms to kill infectious organisms. 6. The HSN Code 3808 94 00 clearly covers all disinfectants. When there is a specific entry covering disinfectants, the impugned product needs to be classified under the said heading 3808 94 00. Further the Chapter Note 1 to the Chapter 38 clearly states that this Chapter does not cover medicaments (Heading 3003 or 3004). Hence, it is be decided whether the product in question is covered under HSN 3003 or 3004 or not. HSN 3004 reads as under: "Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in the forms of packings for retail sale, including Ayurvedic, Unani, Siddha, homoeopathic or bio-chemical systems medicaments, put up in retail sale". 6.1 It is clear from the above, for any goods to be covered under HSN 3004, the said goods should be for "therapeutic use" or for "prophylactic use". It is seen that the agent would be called a therapeutic agent only if it has a cura....
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....actic use. This refers is products (for example, sodium bicarbonate and tamarind powder) which, because of their packing and, in particular, the presence of appropriate indications (statement of disease or condition for which they are to be used, method of use or application, statement of dose, etc.) are clearly intended for sale directly to users (private persons, hospitals, etc.) without repacking, for the above purposes. These indications (in any language) may be given by label, literature or otherwise. However, the mere indication of pharmaceutical or other degree of purity is not alone sufficient to justify classification in this heading. From the above also, it is clear that sanitizers are not available as tablets, ampoules etc. Therefore, it is not classifiable under Heading 3004. 7. HSN 3003 reads as under: "Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic use, not put up in measured doses or in forms or packings for retail sale, including Ayurvedic, Unani, Siddha, homoeopathic or bio-chemical systems medicaments". Even here, the same logic which is applic....