In re Bio-Rad Laboratories India Ltd. (GST AAR Karnataka)
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 II to the Notification No.1/2017-Integrated Tax (Rate) dated 28-06-2017 attracting a levy of Integrated Tax at the rate of 12%?
The ‘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%, in terms of the clarification issued vide para No.10 of the Circular No. 163/19/ 2021-GST dated 6th October, 2021.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, KARNATAKA
M/s Bio-Rad Laboratories India Ltd., (called ‘applicant’ hereinafter), Unit No. 304, Brigade Rubix, Plot No.MYS 357, Peenya Plantation, III Floor, Bangalore North Taluk HMT factory Main Road, Yeshwanthapur, Bengaluru – 560 013. having GSTIN 29AAACB3202A2ZI, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules 2017 & KGST Act 2017 read with Rule 104 of KGST Rules 2017, in FORM GST ARA-01, discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The Applicant is a limited company, registered under the GST Acts (CGST/KGST) 2017, engaged in the business of import and sale of medical 86 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 ar 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 tariff heading 3822 and discharging applicable taxes levied thereon.
4.2 The reagents 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, under GST regime. There is no other entry in any of the schedules under the said notifications specifying the rate of tax for goods covered under tariff heading 3822.
4.3 Further, Entry No. 453 of Schedule III to the GST rate notification is a residuary entry which prescribes the tax at the rate of 18% in respect of goods which are not specified in Schedule I,II,IV,V or VI.
5. Applicant’s Interpretation of Law:
5.1 Entry No. 80 of Schedule-2 covers all type of reagents classifiable under Chapter Heading 3822:
a) With the introduction of GST, the GST Council has fitted various goods under four tax slabs – 5% ( Schedule 1), 12 % ( Schedule 2), 18 % ( Schedule 3) and 28 % ( Schedule 4). Respective Rate Notifications for GST were issued under CGST, SGST and IGST Acts whereby various goods were categorized under different Schedules and each Schedule carried a different rate of tax. Explanation (3) to the Rate Notification for GST clearly provides that ” tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975. The explanation to Notification No.1/2017-Integrated Tax (Rate) dated 28-06-2017 (supra) itself clarifies that the heading under the Schedule of the Customs Tariff Act, 1975 i.e., Import Tariff is relevant for GST as well.
b) In this context, it may be stated that Schedule 2 of Notification No.1/2017-Integrated Tax (Rate) dated 28-06-2017 (supra) prescribes rates for all diagnostic kits and reagents as classified under Chapter Heading 3822. Chapter 38 of the Customs Tariff covers Miscellaneous Chemical Products’. Further, heading 3822 thereunder deals with ‘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’. The relevant extract of the same is provided below:
