CRP and HbAlc diagnostic kits attract GST Rate of 12%

CRP and HbAlc diagnostic kits covered under Schedule II Serial No. 80 heading 38.22 of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 as amended attracting GST @ 12%

M/S Accurex Biomedical Private Ltd. vs Mun-VAT-E-624; Maharashtra Authority for Advance Ruling; Mumbai; 11.10.2021

The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and Maharashtra Goods and Services Tax Act, 2017 by the Applicant seeking an advance ruling in respect of the following questions:

HSN classification and GST rate to be charged on below products:

i. Turbilatex C-reactive protein (CRP) infinite

ii. HbAlc infinite

Facts and Applicant’s contention:

• CRP: Intended use or purpose of CRP diganotics kit for the quantitative determination of C-reactive protein (CRP) in human serum diagnosis of inflammation and infections.
• HbAlc: Intended use or purpose of HbA1c diagnostics kit is for quantitative determination haemoglobin Alc (HbAlc) in human blood for medical diagnosis and monitoring of glycaemic control in diabetic patients.
• Both the aforesaid products classify under chapter 30-Drugs or medicines including their salts and esters and diagnostic test kits, specified in list 1 appended to this Schedule-under Notification No. 1/2017 dt. 28.06.2017 Schedule-1, Sr. No. 180 (List No.1, List no.125)
• As per Notification “01/2017-central tax rate” diagnostic kits & reagents are classified in schedule 1 serial no.180 heading 3002 as well as in schedule II serial no.80 heading 3822.
• Due to multiple classifications possible, the trade industry at large, classify the above mentioned products in different schedule and charge GST rate accordingly. Therefore, the Applicant intended to opt for correct classification in order to settle the questions raised to us by various vendors in relation to GST rate charged.
• Since CRP & HbAlc work on the principle of agglutinating Sera, according to the Applicant products should be classified under heading 30.02, chargeable at CGST rate 2.5%.

Points considered by the bench for judgment:

• List 1 to schedule has entry no.125 “Agglutinating Sera” which is the principle on which CRP & HbAlc works.
• In the case of M/S Span Diagnostics Ltd. vs Commissioner of Central Excise, it has been stated that;- If one reads Chapter Heading 38.22, it becomes clear that there could be all diagnostic kits or reagents which could fall under Chapter Heading 30.02 and also under Chapter Heading 38.22. However, if a diagnostic or laboratory reagent falls under Chapter Heading 30.02 then it stands excluded from Chapter Heading 38.22.

Observations and findings:

• The issue before the bench to be considered was in respect of classification of two products/goods namely, CRP diagnostics kit and HbAlc diagnostics kit.
• The applicant was of the view that the said goods are covered under Chapter Heading 30.02 of the GST Tariff. They have cited Entry No. 125 of List 1 of Sr. No. 180 Schedule I of the GST Tariff [notification no.1/2017-Central Tax (Rate), dated 28.06.2017 as amended from time to time].
• The applicant further stated that there is another entry at Se. No. 80 of Schedule II of the GST Tariff whereby the goods mentioned therein have been classified under Chapter Heading 3822 attracting GST @12%.
• Entry 125 of List 1 of Sr. No. 180 of Schedule I of the aforesaid GST tariff mentions the word “Agglutinating Sera”. The said entry does not mention the word ‘diagnostic kits’. However, specific mention of various diagnostic kits/agents is there in List 1 referred to, by the applicant. The only reason advanced by the applicant for the subject product to fall under heading 30.02 is that the said products work on the principle of ‘Agglutinating Sera’.
• It was further observed from the submissions made by the Applicant that subject goods are not agglutinating sera by themselves. Rather they are diagnostic kits which may work on the principle of ‘agglutinating sera’. The applicant has not helped their own case in as much as they have sought to reclassify their product from HSN Code 38.22 (which is used by them presently) to HSN Code 30.02 not on the basis of any actual evidence but only because some of their competitors are clearing similar goods under HSN Code 30.02. It was further brought to notice of the bench by the jurisdictional officer that there were many more players in the market who were also classifying these goods under HSN Code 38.22.
• It was found that the applicant had not given any submission with respect to the component of the kits which governs to the greatest extent the specificity of the test procedure in terms of explanatory note (E) to Chapter heading 30.2 GST Tariff.
• Hence, it was concluded that the subject could not be covered under heading 30.02 of the GST Tariff as the subject goods are covered under heading 38.22 of the GST Tariff. The heading 38.22 is regarding Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, other than those of heading 30.02 or 30.06 certified reference materials.
• The reagents of heading 38.22 may also be put up in the form of kits, consisting of other components, even if one or more components when presented separately, would be classifiable under another heading.
• As per the latest Notification no. 05/2021-Central Tax (Rate) New Delhi, 14.06.2021 G.S.R.(E) which was valid upto 30.09.2021 during COVID 19 Pandemic situation hit in India vide which Government of India announced reduction in GST Rates on the specified items used in Covid-19 relief and management till 30 Sept 2021. It was clear from the said notification that the rate of GST on CRP (C-reactive Protein) was reduced to 5% for that particular period only else the rate is higher at 12%.

Held:

In view of the aforesaid, the subject goods were held to be covered under Schedule II Serial No. 80 heading 38.22 of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 as amended attracting GST @ 12%.

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