TaxTMI 
TaxTMI 
2021 (12) TMI 887
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....laboratory instruments, laboratory reagents and diagnostic reagents, falling under tariff heading 3822, in India. In view of the above the applicant has sought advance ruling in respect of the following question: Whether 'diagnostic and laboratory reagents' imported and supplied by the applicant and classified under heading 3822 of the Customs Tariff Act, 1975 are covered under Entry No. 80 of Schedule H to the Notification No.1/ 2017-Integrated Tax (Rate) dated 28.06.2017 attracting a levy of Integrated Tax at the rate of 12%? 3. Admissibility of the application: The question is about applicability of entry number 80 of Schedule II to the Notification No.1/2017-Central Tax (Rate), which is covered under "Applicability of a notification issued under the provisions of CGST/KGST Act 2017" and hence the instant application is admissible under Section 97(2)(b) of the CGST Act 2017. 4. The applicant furnished the following facts relevant to their stated activity: 4.1 The applicant is engaged in the business of import and sale of medical & laboratory instruments, laboratory reagents and diagnostic reagents in India. They have been importing and selling reagents under ta....
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....those of heading 3002 or 3006; certified reference materials 382200 Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing. Other than those of heading 3002 or 3006; certified reference materials: --- For medical diagnosis: 38220011 ---- Pregnancy confirmation reagents 38220012 ---- Reagents for diagnosing AIDS 38220019 ---- Other 38220090 --- Other c) Thus, it can be observed that heading 3822 of the Customs Tariff is very broad and covers both diagnostics and laboratory reagents within its ambit. In fact, heading 3822 does not make any bifurcation between diagnostics and laboratory reagents and it is only sub-heading of the said Chapter which bifurcates reagents into (a) medical diagnostic reagent (b) other reagents. d) The description under Entry No 80 of Schedule 2 of GST Rate Notification covers within its ambit 'all diagnostic kits and reagents'. Said Entry is reproduced below for ease of reference: Sr. No. Tariff heading Description of Goods Rate of Tax 80 3822 All diagnostic kits and reagents 12% e) For a product to be covered under the....
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....ve intention indicates that both Diagnostic and Laboratory reagent are covered under Entry No. 80 of Schedule-2 a) Prior to commencement of GST regime, a Fitment Committee was constituted by the GST Council to examine the representations received from Central and State Governments and other stakeholders regarding rate of GST to be levied on various products. The objective of the Fitment Committee was to recommend suitable rate of tax on various goods so as to lower the indirect tax burden being incurred on such goods pre-GST. The Fitment Committee, in its meeting held on 07-08 June 2017, examined such representations with reference to the incidence of aggregate existing indirect taxes under erstwhile laws, and recommended a rate of 12% for Diagnostics or Laboratory Reagents' covered under heading 3822 as opposed to the then existing tax incidence of 18.89 %. Additionally, the Committee inserted an explanation along side the said recommendation that "all diagnostic kits and reagents of 3822 may be kept at 12%". The recommendations of the Fitment Committee were taken up as item no. 3 in the agenda of 16th GST Council Meeting dated 11 June 2017. Copy of the Agenda Items for 16th GS....
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....which must, if they are plain and unambiguous, be applied as they stand." e) Similar view has been upheld by the Supreme Court in the following judgements: i. Southern Motors vs. State of Karnataka, Supreme Court [2017 (1) TMI 958- Supreme Court] ii. KP Varghese vs. Income-Tax Officer, Supreme Court [1981 AIR 1922] iii. Ghanashyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd., Supreme Court [2021 (4) TMI 613-Supreme Court] f) Thus, in view of the above, the laboratory and diagnostic reagents imported and supplied by the Applicant, without any doubt, falls within the ambit of Entry No. 80 of Schedule 2 of GST Rate Notification and any ambiguities arising there from is susceptible to be overshadowed by the clear legislative intent while formulating the said entry. 5.3. View is supported by various rulings of Advance Ruling authorities and Karnataka Appellate Advance Ruling authority a) The interpretation adopted and put forward by the Applicant is supported by the ruling pronounced by Appellate Authority for Advance Ruling, Karnataka in the matter of Re: M/s. Chromachemie Laboratory Private Limited [KAR /AAAR- 08/2019....
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....ent in the earlier tax regime." b) Similar issue was the subject matter of the following cases, wherein the view taken by the Authority for Advance Ruling was ad idem to the decision in Chromachemie Laboratory Private Limited (supra): i. Re: M/s Kaustubha Scientific Research Laboratory Private Ltd., Karnataka Authority for Advance Ruling [KAR ADRG 24/2021] ii. Re: M/s Analytica Chemie Inc., Karnataka Authority for Advance Ruling [KAR ADRG 25/2021] iii. Re: M/s Neogen Food and Animal Security (India) Private Ltd. Kerala Authority for Advance Ruling [KER/ 106/2021] 5.4 Residual entry cannot be considered when there is a specific entry a) GST Rate Notification at Entry No. 453 to Schedule 3 provides a residuary category wherein all goods which are not specified in any other schedule shall be subjected to GST at the rate of 18%. However, given that the reagents imported and supplied by the Applicant is covered under the Specific Entry No 80 of Schedule 2, they cannot be taxed under the residual category. b) In this regard, applicant would like to submit that it is settled principle of law that reference should be made to the general or residual en....
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....he balance of convenience must fall in favor of assessee. One such exception to this rule is interpretation of exemption notifications where the benefit of doubt goes in favor of the revenue. However, notwithstanding and without prejudice to the above submissions, the Applicant states that the entries mentioned in the GST Rate Notification are in nature of allocation of rate of tax applicable on various products, and not grant of exemption from imposition of tax. Classification of a particular product under an entry levying tax on a lesser rate does not imply an exemption on that product. Hence, interpretation of language in GST Rate Notification, not being an exemption notification, must be construed in a way to benefit the assessee in case of any doubt regarding its applicability. In this regard, reliance is placed by the applicant on the following judgements: i. M/S. Southern Motors vs. State of Karnataka, Supreme Court [2017 (1) TMI 958- Supreme Court] ii. Commissioner of Central Excise vs. M/s Mewar Bartan Nirman Udyog, Supreme Court [2008 (231) E.L.T. 27 (SC)] iii. M/S Hotel Leela Venture Ltd. vs. Commissioner of Customs, Supreme Court [2009 (234) E....
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....the KGST Act, 2017 are in pari-materia and have the same provisions in like matters and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 8. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts along with the arguments made by the applicant during the personal hearing. 9. The applicant is engaged in the business of import and sale of medical & laboratory instruments, laboratory reagents and diagnostic reagents in India. They have been importing and selling reagents under tariff heading 3822 and discharging applicable taxes levied thereon. 10. The issue before us to decide is whether the reagents being imported & supplied by the applicant under tariff heading 3822 are covered under Entry No.80 of Schedule II to the Notification No.1/2017-Central Tax (Rate) and Notification No.1/2017- Integrated Tax (Rate) both dated 28.06.2017 ....