Page 135 - GSTL_ 28th May 2020_Vol 36_Part 4

2020 ] IN RE : BIOCON LTD. (DTA) 581
tion of suitable liquid yield solutions confirming in all respects to the require-
ment for injections. The applicant in the instant case supply Micafungin Sodium
as Bulk Drug to their customers, which may not be used directly for injection.
However, they assert that invariably the final formulations of Micafungin Sodi-
um for Injection cannot be manufactured without using Micafungin Sodium as
sold by the applicant. Micafungin Sodium supplied by the applicant is used by
their customers to manufacture formulations or vials which are labelled as “Mi-
cafungin Sodium for Injection”.
8.5 The applicant contended that they are eligible to avail the benefit of
Serial No. 114 of List-I relevant to Entry No. 180 of Schedule-I of Notification No.
1/2017-C.T. (R), dated 28-6-2017 which mentions the rate of CGST for “Micafun-
gin Sodium for Injection” as 2.5%, on the basis of the judgment of Hon’ble Su-
preme Court of India in the case of Indian Chamber of Commerce v. CIT West Ben-
gal-II, Calcutta.
The aforesaid SC judgment is in relation to the Income-tax Act and the
Hon’ble Supreme Court, while discussing the income-tax exemption, under
‘charitable purpose’ whether the activity (of income-taxpayer) is for profit or not,
have noted the meaning of ‘for’ as under :
Further, what is an activity for profit depends on the correct connotation of
the preposition. ‘For’ used with the active participle of a verb means for the
purpose of ([SC] judgment of Westbury C., 1127) ‘For’ has many shades of
meaning. It connotes the end with reference to which anything is done. It
also bears the sense of ‘appropriate or ‘adopted to’: ‘suitable to purpose’ vi-
de Black’s Legal Dictionary. An activity which yields a profit or gain in the
ordinary course must be presumed to have been done for profit or gain. Of
course, an extreme case could be imagined where without intent or purpose
an activity may yield profit. Even so, it may legitimately be said that the ac-
tivity is ‘appropriate or adapted to such profit’.
8.6 At this juncture, it is pertinent to mention here that the Larger
Bench consisting of Five Judges of the Hon’ble Supreme Court in the case of CIT
v. Surat Arts & Silk Cloth Manufacturers Association did not agree with the view
expressed by the Hon’ble Supreme Court in the case of Indian Chamber of Com-
merce v. CIT and declined to follow the said judgment.
8.7 However, even if the Hon’ble SC judgment, which gives the mean-
ing of the word ‘for’, is considered it could be observed that the same is applied
to a particular transaction that whether the activity of a taxpayer is for profit or
not. In the instant case, as per GST Act, the impugned issue involves two transac-
tions i.e. (i) the supply of the bulk drug by the applicant to their customers, and
(ii) the supply by the customers of the applicant to the end users. The transaction
relevant to the instant case is the supply of bulk drug by the applicant to their
customers and GST is leviable on every transaction that amounts to supply, in
terms of CGST Act, 2017.
8.8 The phrase “Micafungin Sodium for Injection” very clearly specifies
the manner of administering Micafungin Sodium in the body. The applicant,
during the personal hearing, with regard to possibility of administering Mica-
fungin Sodium by any way other than injection, have not put anything on record
but have stated that they take a certificate/undertaking from their customers that
they would use it only for injections.

GST LAW TIMES  28th May 2020  135