2018 (7) TMI 388 – AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – 2018 (14) G. S. T. L. 493 (A. A. R. – GST) – Classification of goods – Rate of GST – Lyophilizers-Machinery for the plant – Machinery meant for manufacturing life saving drugs – applicant is in strong belief that Lyophilizers i.e. Machinery for Plant manufactured by the applicant fall under Entry No.320 of schedule III by following the amendment carried over to it by N/N. 41/2017- Central Tax(rate) dated 14.11.2017.
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Held that:- The process of Lyophilization, is defined as a freeze-drying process that removes water from a product after it is frozen and placed under a vacuum. It is a low temperature dehydration process which involves freezing the product, lowering pressure, then removing the ice by sublimation. Freeze drying results in a high quality product because of the low temperature used in processing – the application of the process of lyophilization is found not only in pharmaceutical industry, but als
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ater heaters, non-electric [other than Solar water heater and system]” falling under heading 8419 of the GST Tariff have been brought under Schedule-III of the Notification, notifying the rate of central tax as 9% as per G.O.Ms No. 250, Revenue (CT-II) Department, Dt. 21-11-2017. As the goods Lyophilizers are classifiable under the heading 8419 of the GST Tariff, the rate of central tax applicable is 9% only.
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Ruling:- The tax rate leviable on supply of “ Lyophilizers” falling under the tariff heading 8419 of the GST Tariff is 9% CGST + 9% SGST. – A.R.Com/8/2018 And TSAAR Order No. 5/2018 Dated:- 2-7-2018 – Mr. J. Lakshminarayana, ADDL. COMMISSIONER (State Tax) And Mr. V. Srinivas, JOINT COMMISSIONER (Central Tax) RULING M/s. Lyophilization Systems India Private Limited, Plot No.26/27, Aleap Industrial Estate, Opp. JNTU Road, Near Pragathi nagar, Kukatpally, Hyderabad (GSTIN No.36AAACL8746M1ZY) has filed an application in Form GST ARA-01under Section 97(1) of TGST Act,2017 read w
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her words can be called as Machinery meant for manufacturing life saving drugs . 3.2 The technical aspects of this machinery are as under: (a) Application of Lyophilizer: Lyophilization is a dehydration process typically used to preserve perishable material or make the material more convenient for transport and also to increase the product efficacy with long life. Lyophilization works by cooling the product below eutectic temperature and then reducing the surrounding pressure to allow the frozen water in the material to sublime directly from the solid phase to the gas phase. (b) Process description: The Lyophilizer consists of product chamber with shelves and condenser chamber with cooling coils. The product to be converted is placed on the shelves and cooled below its eutectic temperature. Once the product if below its eutectic temperature, the chambers are evacuated to high vacuum, during this process the water in the product sublimes and condenses on the condenser chamber coils. Thi
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e levy of GST at a rate lower than 14% in those days. 3.4 However, as on 15.11.2017, the above machinery falls under rate of tax of 9% as per the notification No. 41/2017- Central Tax(rate) dated 14.11.2017 and the customers of the applicant are insisting to charge GST at the rate of 9% only but not at the rate of 14%. 3.5 The following is the text of amendment carried over to Entry No.320 in schedule III to the Notification No.1/2017-Central Tax(Rate), dated. 28.06.2017. (lxxx) in S. No. 320, for the entry in columns (2) and (3), the following entries shall be substituted, namely:- 8419 Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of
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involving a change in temperature i.e Heat exchange which is notified in the above notification against the goods enumerated against chapter heading 8419. (d) Apart from the above function, the goods cleared by the applicant discharges the following activities which are mentioned in the above enumeration. Heating, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling. The lyophilizers manufactured by the applicant are not at all falling under the list of goods excluded from the purview of the amended version of Entry No.320 in schedule III. 6. Hence, the applicant is in strong belief that Lyophilizers i.e. Machinery for Plant manufactured by the applicant fall under Entry No.320 of schedule III by following the amendment carried over to it by Notification No.41/2017- Central Tax(rate) dated 14.11.2017. 7. The issues raised in the application has been examined, before deciding the rate of tax applicable for the goods Lyophil
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logics and other injectables. By removing the water from the material and sealing the material in a glass vial, the material can be easily stored, shipped, and later reconstituted to its original form for injection. Thus the application of the process of lyophilization is found not only in pharmaceutical industry, but also in various other industries. 9. The goods such as Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes are covered under Tariff heading 8419 of Customs Tariff. On examination of the process of Lyophilization, it is found that the goods Lyophilizers are classifiable under Tariff heading 8
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ly heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, non-electric [other than Solar water heater and system] falling under heading 8419 of the GST Tariff have been brought under Schedule-III of the Notification, notifying the rate of central tax as 9% as per G.O.Ms No. 250, Revenue (CT-II) Department, Dt. 21-11-2017. As the goods Lyophilizers are classifiable under the heading 8419 of the GST Tariff, the rate of central tax applicable is 9% only. 12. The issue raised in the application has been examined with reference to the provisions of the CGST/TGST Act, 2017 and the Rules made there under and the notifications issued till date;
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