2021-TIOL-540-HC-MAD-GST

Neyveli Nlc Contractors Welfare Association Vs CCGST & CE

GST - What is challenged is a communication dated 06.02.2021, whereunder the Neyveli Lignite Corporation (NLC) calls upon its Units/Officers to recover the amounts of tax collected by its vendors (members of the petitioner association), but not deposited.

Held: NLC appears to have suffered a reversal of the Input Tax Credit claimed by it and the demand raised has been remitted by it - The impugned communication only seeks to enforce the contract qua NLC and its vendors - This is not a matter which warrants interference or attention of this Court as the liability of the deductors to remit the tax deducted by it to the coffers of the Department, is absolute - In fact, failure to do so would render them liable to interest and penal action - The members of the petitioner association are at liberty to approach NLC seeking its indulgence for additional time to remit tax, not/short deducted and it is for NLC to consider the same: High Court

- Petition dismissed : MADRAS HIGH COURT

2021-TIOL-539-HC-MP-GST

Vehicle Factory Jabalpur Vs Joint Commissioner

GST - Writ petition is directed against the order of the Joint Commissioner, CGST confirming demand of Rs.12,83,72,983/- along with interest and penalty - Petitioner submits that it is a unit established by Government of India, Ministry of Defence, Department of Defence Production and Ordnance Factory Board, Jabalpur; that the petitioner had to approach this Court as the Appellate Authority may insist on pre-deposit for entertainment of appeal in view of sub-section (6) of Section 107 of the Central GST Act, 2017 .

Held: Without expressing any opinion on the merits, Bench deems it appropriate to require the petitioner to file an appeal before the Appellate Authority within a period of 10 days - It is also directed that the Appellate Authority shall, in the peculiar facts, entertain and without insisting on payment of pre-deposit decide the appeal on merits of the case within three months - Writ petition is disposed of: High Court

- Petition disposed of :MADHYA PRADESH HIGH COURT

2021-TIOL-89-AAR-GST

Ce Chem Pharmaceuticals Pvt Ltd

GST - Applicant seeks a ruling as to whether Isopropyl rubbing alcohol IP and Chlorhexidine Gluconate and Isopropyl Alcohol solution are to be classified under Chapter Heading 3004 attracting 12 % GST, and if not, what would be the appropriate classification and justification for such classification - Applicant submits that they obtained permission to manufacture the products mentioned (supra) as there is considerable requirement for hand sanitizers due to the present pandemic of covid-19; that a letter No.DCD /MFG/CR-760/19-20 dated 18 May 2020 is issued in this regard by the Additional Drugs Controller & Licensing Authority.

Held : Hand sanitizers are used to disinfect the skin surfaces from microbes and viruses - Disinfectants are frequently used in hospitals, dental surgeries, kitchens, and bathrooms to kill infectious organisms - Drugs not only include medicines but also substances - So, obtaining a license for manufacturing of hand sanitizers, which is a disinfectant is actually a compliance of Drugs and Cosmetic Act, 1940 - However, to decide the issue whether the disinfectant/ hand sanitizer should fall under HSN 3004 or 3808, Authority needs to revert to HSN explanatory notes, case laws and common understanding of the product in the market -The HSN Code 3808 94 00 clearly covers all disinfectants - When there is a specific entry covering disinfectants, the same needs to be classified under the same head - But the Chapter Note 1 to the Chapter 38 clearly states that this Chapter does not cover medicaments (Heading 3003 or 3004) - For a goods to be covered under HSN 3004, the goods so supplied should be for "therapeutic use" or for "prophylactic use" - It is seen that the agent would be called a therapeutic agent only if it has a curative effect against a disease - Since the product in question is not used for treatment of an already prevalent disease in a patient, the same cannot be said to have a therapeutic use - It is clear that sanitizers are not available as measured doses or in forms of tablets, ampoules etc., therefore, it is not classifiable under Heading 3004 - on the same logic, the products cannot be included in HSN 3003 - Disinfectant is any substance that is used to kill germs, such as viruses, bacteria, and other microorganisms that can cause infection and disease - Further, as per the common parlance also, the Alcohol based hand sanitizers are never classified as Medicaments - Apex Court has in the case of Ciens Laboratories [ 2013-TIOL-38-SC-CX ] ruled that if a product's primary function is care and not cure then it is not a medicament - In the present case, sanitizers are primarily used as care rather than as cure for COVID-19 - People buy hand sanitizers as an alternative to soap and for disinfecting purpose - In the present case, it is seen that the alcohol-based hand sanitizers, as the name itself suggests is to sanitize the hands and disinfect them and hence cannot be covered under Medicaments - Held, therefore, that Isopropyl rubbing alcohol IP and Chlorhexidine Gluconate & Isopropyl Alcohol solution merit classification under Chapter Heading 3808 & attract 18 % GST, in terms of entry no. 87 of Schedule III of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017: AAR

-Application disposed of : AAR