Page 49 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] STATE OF ANDHRA PRADESH v. LINDE INDIA LTD. 7
(vi) The decision of the High Court from which the present appeal aris-
es was rightly based on the judgment of that High Court in Inox Air,
both of which must be upheld by this Court.
9. The rival submissions fall for consideration.
10. We must begin with the statutory framework. Schedule-IV of the
2005 Act prescribes a uniform tax rate of 4%/5% for listed goods. Entry 88 of
Schedule-IV reads as follows :
“Drugs & Medicines whether patent or proprietary, as defined in clauses
(i), (ii) and (iii) of Section 3(b) of Drugs and Cosmetics Act, 1940 (Central
Act 23 of 1940), including hypodermic syringes, hypodermic needles, cat-
guts, sutures, surgical cotton, dressing, plasters, catherters, cannulae, band-
ages and similar articles but not including :
(a) Medicated goods;
(b) Products capable of being used as cosmetics and toilet prepa-
rations including Toothpastes, Tooth powders, cosmetics, Toi-
let articles and soaps; and
(c) Mosquito repellents in any form.”
Entry 88 includes drugs and medicines, whether patent or proprietary as defined
in clauses (i), (ii) and (iii) of Section 3(b) of the 1940 Act. Any drug or medicine
that falls within the ambit of clauses (i), (ii) and (iii) of Section 3(b) falls within
the ambit of Schedule-IV. Entry 88 also stipulates that hypodermic syringes, hy-
podermic needles, catguts, sutures, surgical cotton, dressing, plasters, catherters,
cannulae, bandages and ‘similar articles’ are also included, save and except for
the three specified exclusions.
11. Schedule-V of the 2005 Act reads thus :
“Goods taxable at standard rate (RNR) of [14.5%]
All goods other than those specified in Schedules I, III, IV, VI.”
Schedule-V stipulates that all goods that do not fall within the ambit of Sched-
ules I, III, IV, and VI shall be taxed at a rate of 14.5%.
12. Section 3(b) of the 1940 Act defines a “drug” in the following terms :
“(i) All medicines for internal or external use of human beings or animals
and all substances intended to be used for or in the diagnosis, treat-
ment, mitigation or prevention of any disease or disorder in human
beings, or animals, including preparations applied on human body
for the purpose of repelling insects like mosquitoes;
….
(iv) such devices intended for internal or external use in the diagnosis,
treatment, mitigation or prevention of disease or disorder in human
beings or animals, as may be specified from time to time by the Cen-
tral Government by notification in the Official Gazette, after consulta-
tion with the Board.”
Clause (i) of Section 3(b) defines a drug as all medicines for internal or external
use of human beings or animals and all substances “intended to be used for or in
the diagnosis, treatment, mitigation or prevention of any disease or disorder in
human being, or animals”, including specified preparations. Clause (iv) of Sec-
tion 3(b) includes all ‘devices’ intended for internal or external use in the diagno-
sis, treatment, mitigation or prevention of disease or disorder in human beings or
animals.
GST LAW TIMES  7th May 2020  49