AAR Classifies Dialysis-Related ‘Dry Citrate Powder’ and ‘Bicarbonate Bags’ Under 18% GST Bracket

The applicant, M/s. Soxa Formulations and Research Pvt. Ltd., is a manufacturer of pharmaceutical products and medical consumables. They sought an advance ruling regarding the HSN classification and applicable GST rate for two specific products used in hemodialysis: “Dry Citrate Powder” and “Bicarbonate Bags.”

The applicant contended that these products should be classified under HSN 9018, which covers “instruments and appliances used in medical, surgical, dental or veterinary sciences,” attracting a GST rate of 12%.

Main Issue: Whether “Dry Citrate Powder” and “Bicarbonate Bags” used in the hemodialysis process qualify as medical instruments/appliances under HSN 9018 (12% GST) or should be classified as chemical preparations/inorganic chemicals (18% GST).

AAR’s Ruling: The Authority for Advance Ruling (AAR) ruled that both products are liable to GST at the rate of 18%. The Authority observed that HSN 9018 is reserved for actual instruments, apparatus, or appliances used by healthcare professionals. “Dry Citrate Powder” and “Bicarbonate Bags” are consumables or chemical preparations that facilitate the dialysis process but do not possess the mechanical or functional characteristics of an “instrument” themselves.

The Authority classified “Dry Citrate Powder” as a food/chemical preparation under HSN 2106 or similar, and “Bicarbonate Bags” (containing sodium bicarbonate) under HSN 2836 30 00 as an inorganic chemical. Therefore, both products fall under the 18% tax slab as per Notification No. 1/2017-Central Tax (Rate) and later amendments.

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