In Re : M/s. Lyophilization Systems India Private Limited
GST
2018 (7) TMI 388 – AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – 2018 (14) G. S. T. L. 493 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – AAR
Dated:- 2-7-2018
A. R. Com/8/2018 And TSAAR Order No. 5/2018
GST
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 with Rule 103 of CGST/TGST Rules, 2017and sought Advance Ruling on the following issues:
(i) The rate of tax applicable as on 15.11.2017 on the Lyophilizers- Machinery for the plant which is being cleared under chapter heading 8419.
2. The applicant submitted the application in Form GST ARA-01
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r 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. This process continues for some hours and the product gets dried and all the water removed from the product under heat exchange method. Then the chambers are subjected to steam sterilization by using high pressure steam to sanitize the complete system.
(c ) Use in the Industry and classificati
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nly 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 a kind used for domestic purposes; instantaneous or storage water heaters, non-electric [other than Solar water heater and system]”;
4. The applicant therefore seeks to have an advance ruling on the rate of tax applicable as on 15.11.2017 on Lyophilizers-machinery for the plant
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re 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 ” Lyophilizers”, we would like to examine the correct classification of the product.
8. 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
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n 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 84198990 as per the Section notes to Section XVI and Chapter notes to Chapter 84 of the Customs tariff. As the rules for interpretation of Customs Tariff Act, 1975 was made applicable to GST Tariff, the goods ” Lyophilizers” are classifiable under heading 8419 o
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g, 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; and the Advance Ruling is given as under:
Notification No. 41/2017 – Central Tax (Rate), Date. 14-11-2017
(G.O.Ms No. 250, Revenue (CT-II) Department, Dt. 21-11-2017)
Sl. No.
Chapter / Heading / Sub-heading / Tariff item
Description of Goods
Rate
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