In re Altis Finechem Pvt. Ltd. (GST AAR Gujarat)
Q. 1 Classification of goods and determination of tax liability of product under HSN 2919 of following goods:
Calcium-3-methyl-2oxo-valerate (Alpha-Ketoanalogue Isoleucine Calcium Salt), Calcium-3-methyl-2oxobutyrate (Alpha-Ketoanalogue Valine Calcium Salt), Calcium-4-methyl-2oxo-valerate (Alpha-Ketoanalogue Leucine Calcium Salt), Calcium-DL-2-hydroxy-4(Methylthio) butyrate (Alpha-Ketoanalogue Methionine Calcium Salt), Calcium -2 oxo-3-phenyl propionate (Alpha-Ketoanalogue phenylalanine Calcium Salt)
Ans. It is an admitted fact that the product being supplied by the applicant cannot be directly administered in a human being. The concessional rate of GST is applicable only to the medicine or drugs, which are ready for administering in the human being or person. In the instant case, the applicant supplies bulk drug to their customers and hence the said bulk drug becomes raw material to the said customers. The applicant contention is that their bulk drug i.e. Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt is covered under the entry No. 180 of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and eligible for concessional rate of GST. In the said entry No. 180 of said Notification word “Bulk Drugs” would have been included, had the intention of the Government been to extend the benefit of concessional rate to the bulk drugs/raw material. Therefore 5% GST is not applicable to the bulk drug Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt, in terms of List I to Entry No. 180 of Schedule I to the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017.
The above product are classifiable under HSN 2919 and liable to GST @ 18% {9% CGST +9% SGST} in terms of Notification No. 01/2018-CT (Rate) dated 28.06.2017 as well as corresponding SGST Notification.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, (Gujarat)
Statement of Facts
M/s. Altis Finechem Pvt. Ltd., Plot No. 192 Ground Floor, Nr. Katwad Patiya ,B/h. VRN Ceramics Ltd., At-Dalpur, Sabarkantha having a GSTIN : 24AACCD0786H1ZS, is a company filed an application for Advance Ruling under Section 97 of CGST Act, 2017 and Section 97 of the GGST Act, 2017 in FORM GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the GGST Act.
2. M/s. Altis Finechem Pvt. Ltd. an applicant is engaged in the manufacture and supply of pharmaceutical products viz. Bulk Drugs and intermediates viz. Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt.
3. The applicant submitted that they supply their above product @18% but their customer stated that their product attract 5%. They requested to determine the tax liability of their product falling under HSN 2919.
4. Accordingly, applicant sought Advance Ruling on the following question :
1. Classification of goods and determination of tax liability of product under HSN 2919 of following goods :
Calcium-3-methyl-2oxo-valerate (Alpha-Ketoanalogue Isoleucine Calcium Salt), Calcium-3-methyl-2oxobutyrate (Alpha-Ketoanalogue Valine Calcium Salt), Calcium-4-methyl-2oxo-valerate (Alpha-Ketoanalogue Leucine Calcium Salt), Calcium-DL-2-hydroxy-4(methylthio) butyrate (Alpha-Ketoanalogue Methionine Calcium Salt, Calcium -2 oxo-3-phenyl propionate (Alpha-Ketoanalogue phenylalanine Calcium Salt)
Applicant’s interpretation of law and/or facts
5. The applicant submitted that as per Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 their products is liable to GST @ 5% in respect of goods specified in Schedule-I under Sr. No. 180 under Ch. 30 and under Schedule-1 List -1 Sr. No. 54 as such their product name is “Ketoanalogue preparation of essential amino acids”.
Personal Hearing
6. Personal hearing in the matter was held on 06-08-2020. Authorised representative of the company appeared on behalf of the applicant and re-iterated the submission made in the Application.
DISCUSSION & FINDINGS
7. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative. We have also considered the issues involved on which Advance Ruling is sought by the applicant.
8. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the GGST Act.
9. We observe that the applicant is engaged in the manufacture/supply of bulk drugs and intermediates viz. Alpha-Ketoanalogue Isoleucine Calcium Salt, Alpha-Ketoanalogue Valine Calcium Salt, Alpha-Ketoanalogue Leucine Calcium Salt, Alpha-Ketoanalogue Methionine Calcium Salt, Alpha-Ketoanalogue phenylalanine Calcium Salt. The applicant submitted that they are presently supplying the said goods under HSN 2919 and paying GST @ 18 %. Whereas the applicant contended that their product would classify under CTH No. 30 and liable to pay @5% as per Sr. No. 180 of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017. Now, the main issue is to determination of classification and tax liability of their product i.e. bulk drugs and intermediate supply by the applicant.
10. To examine the eligibility of lower rate of GST 5%, we refer the relevant Sr. No. 180 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017. The said entry is read, as under:
Schedule I- 5%
