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2021 (3) TMI 140 - AAR - GSTClassification of goods - hand sanitizers - Isopropyl rubbing alcohol IP - Chlorhexidine Gluconate - Isopropyl Alcohol solution - to be classified under Chapter Heading 3004 attracting 12 % GST or otherwise? - HELD THAT:- The drugs not only include medicines but also substances. So, obtaining a license for manufacturing of hand sanitizers, which is a disinfectant is actually a compliance of Drugs and Cosmetic Act, 1940. However, to decide the issue whether the disinfectant/ hand sanitizer should fall under HSN 3004 or 3808, we need to revert to HSN explanatory notes, case laws and common understanding of the product in the market. The HSN Code 3808 94 00 clearly covers all disinfectants. When there is a specific entry covering disinfectants, the same needs to be classified under the same head. But the Chapter Note 1 to the Chapter 38 clearly states that this Chapter does not cover medicaments (Heading 3003 or 3004) - for a goods to be covered under HSN 3004, the goods so supplied should be for “therapeutic use” or for “prophylactic use”. It is seen that the agent would be called a therapeutic agent only if it has a curative effect against a disease. Since the product in question is not used for treatment of an already prevalent disease in a patient, the same cannot be said to have a therapeutic use. Meaning of Disinfectants - HELD THAT:- Disinfectants are those goods used for disinfection. The disinfect has the meaning “to get rid of infection” or “cleanse by destroying infecting micro-organisms especially by chemical means. Disinfectant is any substances that is used to kill germs, such as viruses, bacteria, and other microorganisms that can cause infection and disease. Further as per the common parlance also, the Alcohol based hand sanitizers are never classified as Medicaments. People buy hand sanitizers as an alternative to soap and for disinfecting purpose. In the present case, it is seen that the alcohol-based hand sanitizers, as the name itself suggests is to sanitize the hands and disinfect them and hence cannot be covered under Medicaments - The goods covered under heading 3808 are covered entry no. 87 of Schedule III of Notification No.01/2017 - Central Tax (Rate) dated 28.06.2017 and are taxable at the rate of 9% under the CGST Act. Similarly, the goods are taxable at the rate of 9% under the KGST Act.
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