In re Lagom Labs Private Limited (GST AAR Tamilnadu)
Q. Whether the Cramp comfort patch are to be classified under Chapter Heading 3004 attracting 12% GST under serial no. 63 or Chapter Heading 3005 attracting 12% GST under serial no. 64 in Schedule II of Notification 01/2017 – Central Tax (Rate) dated 28 June 2017 and under Serial No: 63 or 64 of Schedule II of Notification G.O. (Ms) No. 62 (NO.II(2)/CTR/532(D-4)/2017) TNGST (Rate), dated 29.06.2017, if not what would be the appropriate classification and justification for such classification?
A. The product Comfort patch is to be classified under HSN 3005 and the applicable CGST is @6% as per serial Number 64 in schedule II of Notification 01/2017 – Central Tax (Rate) dated 28 June 2017 and applicable SGST is @ 6% as per Serial No. 64 of Schedule II of Notification G.O. (Ms) No.62 (No.II(2)/ctr/532(D-4)/2017) TNGST (Rate), dated: 29.06.2017.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
Note: Any appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
M/s. Lagom Labs Private Limited, 715A, 7th Floor, Spencer Plaza, Mount Road, Anna Salai, Chennai, Tamil Nadu, 600 002. (hereinafter called the Applicant) is registered under the GST Vide GSTIN 33AADCL1959K1ZC. They have sought Advance Ruling on the following question:-
Whether the Cramp comfort patch are to be classified under Chapter Heading 3004 attracting 12% GST under serial no. 63 or Chapter Heading 3005 attracting 12% GST under serial no. 64 in Schedule II of Notification 01/2017 – Central Tax (Rate) dated 28 June 2017 and under Serial No: 63 or 64 of Schedule II of Notification G.O. (Ms) No. 62 (NO.II(2)/CTR/532(D-4)/2017) TNGST (Rate), dated 29.06.2017, if not what would be the appropriate classification and justification for such classification?
The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/-each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017.
2.1 The Applicant has stated that they are engaged in supply of various women wellness products such as sanitary pads, value kits which include various products, multipurpose pouch to fit daily essentials, liners and ‘Cramp Comfort’ which are heat patches for period pain, under the brand name ‘Nua’. They have stated that in August 2020 they have launched a new product ‘Cramp Comfort’ which is a heat patch used by women during period pain. The Cramp Comfort patches are air activated and emits heat upon contact with the atmosphere. It relaxes muscles and ensures smooth passage of blood flow during the monthly cycle. These products are available to purchase online at ‘www.nuawoman.com’ as well as other e-commerce platforms such as www.Amazon.in etc.
2.2 The Applicant has stated that they discharge GST on the sale of ‘Cramp Comfort’ at 12% (i.e., 6% as Central GST (‘CGST’) and 6% as Tamil Nadu State GST (‘TNGST’)) under HSN- 3004 – Medicaments (excluding goods of heading 30.02, 30.05 or 30.06) 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 forms or packings for retail sale, including Ayurvedic, Unani, homoeopathic siddha or Bio-chemic systems medicaments, put up for retail sale as per serial no. 63 in Schedule II of Notification 01/2017 – Central Tax (Rate) dated 28 June 2017. They have also stated that they have complied with provisions of Section 37 of Central Goods and Services Tax Act 2017 and Tamil Nadu State Goods and Services Tax, Act 2017 and have been duly filing GSTR 1 and GSTR 3B. They have submitted copy of the returns for the month of March 2021.
2.3 On interpretation of law, in order to classify their product under HSN 3005 the applicant has stated that their product Cramp Comfort is a heat patch which facilitates alleviation of muscle cramps through emission of heat. The product consists of ingredients such as iron powder, activated carbon, vermiculite, salt and water absorber. The ingredients are filled in a triangle-shaped patch made of nonwoven fabric which consists of an adhesive layer on one side. The product is air activated and once the product is unpacked and affixed to the lower abdomen of women, the heat gets emitted on contact with the atmosphere. The effect of the product lasts for the duration of 8 hours post which the patch has to be disposed off. The applicant has referred to SI.No 64 of Notification 01/2017, wherein the description of goods under HSN 3005 falls under at 12% GST. They have extracted the details of description of goods under HSN 3005 viz. as below:-
i. Wadding, gauze, bandages and similar articles (for example, dressings, adhesive plasters, poultices),
ii. Impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes.
They have stated that in order to merit classification under heading 3005, either of the below two conditions must be fulfilled.-
