In re Smt. Rama Devi Guttikonda (GST AAR Telangana)
AAR held that Obesity is not a disease and hence reduction of weight cannot be seen as a treatment against a disease. Therefore The pharmaceutical Pellets and Granules except Orlistat pellet manufactured by the applicant can be classified as medicaments under Sl. No.62 of Schedule II of the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and subject to GST at the rate of 12% as discussed above.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TEANGANA
1. Applicant Smt. Rama Devi Guttikonda and trade name M/s. Spansules Formulations, Plot No.154 A/4, SVCIE Industrial Estate, IDA Bollaram, Jinnaram MandaL, Medchal – Malkajgiri, Telangana- 502325 (36AFTPG0523Q2ZZ) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules.
2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.
3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs.5,000/- for SGST and Rs.5,000/- for CGST towards the fee for Advance Ruling. The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted
4. Brief facts of the case:
M/s. Spansules Formulations have represented that they are holding manufacture license for manufacturing sale of pharmaceutical pellets and granules for treatment of various ailments. They have submitted that these pellets and granules are at a pre stage and ready to be filled into capsules are compressed into tablets. That these are not in measured doses which can be sold in retail markets. That they are paying 18% tax on these goods under CGST & SGST and that they are of the opinion that they have to pay 12%. Hence the application.
5. Questions raised:
Whether the pharmaceutical Pellets and Granules manufactured by the applicant can be classified as Medicaments under Sl.No.62 of Schedule II of the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and subject to GST at the rate of 12%.
6. Personal Hearing:
The Authorized representatives of the unit namely Satya Sai, Advocate and K. S. Prasad, GM Taxation attended the personal hearing held on 25-11-2021. The authorized representatives reiterated their averments in the application submitted and contended as follows:
1. That, they are presently supplying their goods at a higher rate of 18% treating them as falling under Chapter 29.33(HSN).
2. That, after reviewing the classification in light of Notification No.1 of 2017 they are of the opinion that their supplies fall under Sl.No.62 of Schedule II of the said notification.
3. That, they are seeking clarification regarding their opinion on the lower rate of tax.
7. Discussion & Findings:
The applicant has submitted that they are into manufacturing of pharmaceuticals granules from active pharmaceutical ingredients which are in the form of pellets and granules and that these are not put in measured doses which can be used in retail sale.
The applicant has given a list of (15) products manufactured by them and also their constituents. As seen from the list, these are pharmaceutical products with necessarily one active ingredient and more than one excipient.
The contention of the applicant is that, these (15) products have more than one constituents and are not readily usable for retail sale and therefore they are eligible to be classified under the entry in Serial No. 62 of the 2nd Schedule to the Notification No. 01/2017 dated:28.06.2017. This entry reads as follows:
