TMI Blog2021 (12) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.6.2017. - KAR ADRG 78/2021 - - - Dated:- 17-12-2021 - DR. M. P. RAVI PRASAD AND SRI. T. KIRAN REDDY, MEMBER Represented by : Sri Parth S Shah, CA Sri. Ashuthosh Nath, CA ORDER UNDER SECTION 98(4) OF THE CGST TAX ACT, 2017 UNDER SECTION 98(4) OF THE KGST ACT, 2017 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 ₹ 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 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 diagnost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... First Schedule to the Customs Tariff Act, 1975. The explanation to Notification No. 01/2017 (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. 01/2017 (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: Tariff Item Description of Goods 3822 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 382200 Diagnostic or laboratory reagents on a backing, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the entry would have read as all diagnostic kits and diagnostic reagents . Thus, the and should be interpreted in a manner which is drafted and intended. g) It is a well settled rule of statutory interpretation that the word or is normally disjunctive and the word and is normally conjunctive. Where the statue is unambiguous, the word and must be read in a conjunctive sense, intending to draw a distinction between identities of the co-joining words. In this regard, the Applicant relies on the following judgements: a. M/s Mangalore Refinery and Petrochemicals Ltd., Vs State of Karnataka, Karnataka High Court [2021 (7) TMI 345 - Karnataka High Court] b. Commissioner of Central Excise vs. M/s Kulcip Medicines (P) Ltd., Punjab and Haryana High Court [2009 (14) S.T.R. 608 (P H)] c. Himalaya Stone Industries vs. State of Uttarakhand, Uttarakhand High Court [(2013) 62 VST 233 (UTK)] d. Star Industries vs. Commissioner of Customs, CESTAT Mumbai (312) E.L.T. 209 (Tri. - Mumbai)] h) In Applicant s view, the term reagents used in the description of Entry No. 80 of Schedule 2 of GST Rate Notification connotes all reagents covered under heading 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposed under GST compared to the combined indirect taxes levied under erstwhile laws. Serial No. 48 of the said Circular includes Diagnostic kits and reagents covered under heading 3822. Copy of Circular No. 296/07/2017-CX.9 dated 15 June 2017 is enclosed herewith and marked as Exhibit 4 . c) Thereafter, the GST Rate Notification was issued on 28 June 2017 prescribing the rate of tax on All diagnostic kits and reagents covered under heading 3822 to be 12% vide entry no. 80 of Schedule 2 thereof. In view of the above, it is clear that the intent behind the said Entry no. 80 is to give effect to the Fitment Committee s recommendation of taxing Diagnostics or Laboratory Reagents covered under heading 3822 at the rate of 12%. The text All diagnostic kits and reagents used in the said entry is nothing but a reproduction of the Committee s comments assigned to the recommendation. d) It is a settled principle that intention of a law maker plays a pivotal role in interpreting a provision. In this regard, reference can be made to the case of Doypack Systems (Pvt) Ltd. vs. Union of India [1988 (36) E.L.T. 201 (SC)], relevant extract of which is reproduced below: 57. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No. 01/2017, the entry SL. No 80 of Schedule 2 describes the goods under Chapter Heading 3822 as All diagnostic kits and reagents . This implies that all reagents falling under Chapter Heading 3822 are covered under the said entry SL. No. 80. As mentioned earlier. The Heading 3822 of the Customs Tariff applies to both diagnostic and laboratory reagents. Therefore, the correct way to read the entry SL. No 80 of Schedule 2 would be all diagnostic kits and all reagents . To limit the term reagents in the rate Notification as being applicable only to diagnostic reagents is an incorrect interpretation. When the Heading 3822 of the Customs Tariff clearly has within its fold reagents which are both diagnostic as well as laboratory reagents on a backing and prepared diagnostic and laboratory reagents with or without a backing. The use of the single word reagents in the entry SL. No 80 of Schedule 2 should be understood as a generic word encompassing all the reagents mentioned under Heading 3822 of the Customs Tariff .. .We also find that the Fitment Committee Committee which was mandated to recommend suitable GST rates for goods, have., after taking into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n could be brought under a specific entry then there is no reason to take resort to the residuary entry . c) Similar view was taken by the judiciary in the following judgements: i. Bharat Forge Press Industies (P) Ltd. vs. Collector of C. Ex, Supreme Court [1990 (45) E.L.T. 525 (SC)] ii. Commissioner of Commercial Tax vs. M/s A.R. Thermosets Pvt. Ltd., Supreme Court, [2016 (339) E.L.T. 500 (SC)] iii. Commissioner of Central Excise vs. M/s Wockhardt Life Sciences Ltd., Supreme Court, [2012 (277) E.L.T. 299 (SC)] iv. HPL Chemicals Ltd. vs. CCE, Supreme Court, [2006 (197) E.L.T. 324 (SC)] v. Mauri Yeast India Pvt. Ltd. vs. State of UP, Supreme Court, [2008 (225) E.L.T. 321 (SC)] vi. Speedway Rubber Co. vs. Commissioner of Central Excise, Supreme Court, [2002 (143) E.L.T. 8 (SC)] vii. Western India Plywoods Ltd. vs. Collector of Customs, Supreme Court, [2005 (188) E.L.T. 365 ( SC)] d) The laboratory and diagnostic reagents imported and supplied by the Applicant squarely falls within the scope of generic term reagents which is specifically included in Entry No. 80 of the Schedule 2. Hence, the said products cannot, by any stret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST Rate Notification, all diagnostics kits and reagents to both laboratory and diagnostic reagents, the benefit of such doubt must go in favor of the applicant. 5.6. In view of the discussion, the Applicant concludes their view as follows: a. The description all diagnostic kits and reagents mentioned in Entry No. 80 of Schedule 2 of GST Rate Notification includes all reagents covered under heading 3822 within its scope, whether laboratory or diagnostic. Therefore, the laboratory and diagnostic reagents imported and supplied by the Applicant under heading 3822 is covered under the said Entry and attracts a levy of tax at the rate of 12%. b. The said view is supported by (i) intention of the legislature (ii) principles governing the interpretation of the statute and (iii) Ruling pronounced by Karnataka Appellate Authority for advance Ruling and other Advance Ruling Authorities. 5.7. The applicant requested to grant an opportunity of personal hearing in this matter in order to explain the matter more lucidly. PERSONAL HEARING PROCEEDINGS HELD ON 26.11.2021. 6. Shri. Sri. Parth S Shah Sri. Ashuthosh Nath, Chartered Accountants Authorised Representatives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19/2021-GST dated 6 th October, 2021, clarified the issue of whether the benefit of concessional rate of 12% would be available to laboratory agents and other goods falling under heading 3822 . It is held that the intention of the entry at S. No. 80 of Schedule II of notification No.1/2017- Integrated Tax (Rate) dated 28.6.2017 was to prescribe GST rate of 12% to all goods, whether diagnostic or laboratory regents, falling under heading 3822. Accordingly it is clarified that concessional GST rate of 12% is applicable on all goods falling under heading 3822, vide Entry at S. No. 80 of Schedule II of notification No.1/2017-Integrated Tax (Rate) dated 28.6.2017. 13. In view of the foregoing, we pass the following RULING 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 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%, in terms of the clarification issued vide para No.10 of the Circular No. 163/ 19/ 2021-GS7 dated 6th October, 2021. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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