18% GST Applicable for F-18 Drugs used for Cancer Diagnosis: AAR [Read Order]

18% GST Applicable for F-18 Drugs used for Cancer Diagnosis rules AAR
GST - Drugs - Cancer Diagnosis - AAR - Drugs used for Cancer Diagnosis - taxscan

The Uttar Pradesh Authority for Advance Ruling (AAR) ruled that 18% GST is applicable for F-18 drugs used for cancer diagnosis.

The applicant, re IBA Molecular Imaging (India) P. Ltd is registered under the provisions of Central Goods and Services Tax Act, 2017 as well as Uttar Pradesh Goods and Services Tax Act, 2017. The applicant is engaged in the manufacture of pioneer drugs labelled as 18F-Fluorodeoxyglucose, 18F PSMA, 18 F DOPA and many more Radioactive compounds labelled with F 18. F18 compound are Radioactive isotopes, used as diagnostic reagent, used primarily for diagnosis of cancer.

The issue is whether the F-18 Products would be classified under HSN 30063000, leviable to GST at the rate of 12%, in terms of entry no 65 of Schedule II of the Notification No 01/2017-CT (Rate), dated 28.06.2017 issued under Central Goods and services Tax Act, 2017 (CGST Act, 2017) read with if corresponding rate notification issued under the provisions of Uttar Pradesh Goods and Services Tax Act (UPGST) Act, 2017, or not.

The appellant contended that ‘FDG/F-18″ is not specifically mentioned in the Rate tariff. F-18 compounds are diagnostic reagent primarily used for diagnosis of cancer. – ‘F-18 products having pharmaceutical use shall merit classification under chapter 30 and Note 4 to chapter 30 specifies that ‘Heading 3006 applies only to the following, which are to be classified in that heading and in no other heading of this schedule’ wherein sub heading (d) to note 4 stipulates.

A Two-Member Bench of the Authority comprising Amit Kumar, Joint Commissioner (Central Tax) and Harilal Prajapati, Joint Commissioner (State Tax) observed that “It can be seen that F-18 products are essentially radioactive isotopes which are used in radiopharmaceutical imaging such as PET scanning. Although they are used as a pharmaceutical product for the diagnosis and detection of various diseases, 18F FDG and other 18F radiopharmaceutical products are compounds of the radioisotope 18F. Heading 2844 of the Tariff covers radioactive isotopes and their compounds. 18F-FDG being a compound of the radioisotope 18F, it would fall under the heading 2844.”

The Tribunal noted that F-18 drugs attracts 18% GST(9% CGST + 9% SGST).

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates