Page 49 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] QUESTION-ANSWER BOX J107
There is nothing in your query to show as to on what basis the Department is
seeking to challenge your classification. We presume that they are contesting
with Heading 3402 of Customs Tariff Act, 1975 in mind.
The relevant Heads are reproduced below :

3004 Medicaments (excluding goods of heading 30.02, 12 28-6-2017
30.05 or 30.06) consisting of mixed or unmixed
products for therapeutic or prophylactic uses, put up
in measured doses (including those in the form of
transdermal administration systems) or in forms or
packings for retail sale, including Ayurvaedic,
Unani, homoeopathic siddha or Bio-chemic systems
medicaments, put up for retail sale

HSN Code : 3402
Products : Organic Surface Active Agents (Other Than Soap), Surface Active
Preparations, Washing Preparations (Including Auxiliary Washing Prepara-
tions) And Cleaning Preparations, Whether Or Not Containing Soap, Other
Than Those Of
Description : Organic Surface Active Agents (Other Than Soap), Surface Ac-
tive Preparations, Washing Preparations (Including Auxiliary Washing Prep-
arations) And Cleaning Preparations, Whether Or Not Containing Soap, Oth-
er Than Those Of Heading 3401.
It is broadly being presumed in the absence of basis of challenge, that the depart-
ment is of the view that the hand sanitizer being manufactured by you does not fall
under HSN Code 3004 as Ayurvedic, Unani and attracting GST @ 12% rate with
effect from 28-6-2017.
However, it is clear that in the absence of any definition of what consti-
tutes an ‘Ayurvedic’ Medicament, the relevant case law, the opinion of the con-
cerned Drug and Regulatory Authorities and the description and conditions of
Chapter Notes and Tariff Head will be decisive factors. Foremost, from the Tariff
Heading claimed by you of 3004 the following conditions emerge :
(1) Medicaments should not be from the excluded heads.
(2) They should have some therapeutic or prophylactic use and should
have either measured doses or should be in the forms or packing for
retail sale.
(3) The Head also includes Ayurvedic, Unani system medicaments put
up for retail sale.
From the facts stated by you, it is clear that you have been granted a Drug License
by Auysh Department which is the Authorised Department of Government of In-
dia to issue Ayurvedic Drug Licenses and it has even certified your ingredients,
which are to be used for manufacture of products in question. You are also putting
your product in packages fit for retail sale. Therefore, it is apparent that you are
complying with all conditions to qualify for your entitlement for the aforesaid
Head, as you do not fall even in the excluded heads.
As the following judgments will indicate the Apex Court has liberally
construed as to what constitute ‘Ayurvedic Medicaments” and following propo-
sitions are reducible from the case laws :

GST LAW TIMES  23rd July 2020  49