AAR Karnataka Rules 12% GST applicable on Supply & Import of Prepared Laboratory Reagents

AAR Karnataka Rules 12% GST applicable on Supply & Import of Prepared Laboratory Reagents

The Authority of Advance Ruling (AAR) Karnataka bench in the case titled M/s Kaustubha Scientific Research Lab Pvt Ltd (Applicant) v. Commissioner of Indirect Tax (Respondent) ruled that 12 per cent Goods & Services Tax (GST) is applicable on supply and import of Pharmaceutical Reference Standards prepared Laboratory Reagents.

The AAR coram comprising of Dr Ravi Prasad and Member Mashood Ur Rehman Farooqui ruled that the Pharmaceutical Reference Standards (Prepared Laboratory Reagents) imported and supplied by the Appellant and classified under Tariff Item 3822 00 90 of the Customs Tariff Act, 1975 is covered under Entry No. 80 of Schedule-II to Notification No. 1/2017-Integrated Tax (Rate), dated 28 June 2017 attracting a levy of Integrated Tax at the rate of 12 per cent.

The factual background of the case is that the applicant is a registered person under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act) as well as the Karnataka Goods and Services Tax Act, 2017 (KGST Act).

He has been engaged in the distribution of Pharmaceutical Reference Standards from Pharmacopoeias like European Pharmacopoeia (EP), British Pharmacopeia (BP), Indian Pharmacopeia (IP) and Japanese Pharmacopoeia (JP).

The applicant is seeking advance ruling on the applicability of entry Notification No. 01/2017-IT (R) for their product prepared laboratory reagents/Pharmaceutical Reference Standards.

Issue before the AAR

Whether the applicable entry for prepared laboratory reagents/Pharmaceutical Reference Standards in the Notification No. 01/2017-IT (R) is Sr. No. 80 of Schedule II, attracting a levy of 12 per cent or Sr. No. 453 of Schedule III attracting a levy of 18 per cent?

While answering the aforesaid issue the AAR ruled that 12 per cent GST is applicable on supply and import of Pharmaceutical Reference Standards prepared Laboratory Reagents.