The Gujarat Authority of Advance Ruling (AAR) ruled that 5% GST not applicable to the bulk drug Danuorubicin, Epirubicin, Idarubicin and Zoledronin Acid.
The applicant, M/s. Sterling Biotech Ltd. is engaged in the manufacture of pharmaceutical products viz. Bulk Drugs located at Village masar, Dist Jambusar in the state of Gujarat. Masa plants mainly manufacture bulk drugs which are consumed in manufacture of life saving drugs and medicaments for treatment of cancer, etc.
The applicant submitted that they are manufacturing bulk drugs namely Danuorubicin, Epirubicin, Idarubicin and Zoledronin Acid and supplying presently under general heading at Sr. No. 40 covered under chapter 29 of Schedule-III of the Not. No. 01/2017-Ct (rate) dated June 28, 2017 as well as State Notification and Integrated Tax Notification.
The applicant sought the advance ruling on the issue whether the applicant is eligible to claim the benefit of lower rate of 5% (CGST- 25.% and SGST-2.5%) under Sr. No. 180 of Schedule I of the rate schedule for goods under Not. No. 01/2017-CT (Rate) dated June 28, 2017 as well as of State Tax Notification.
The coram consisting of Sanjay Saxena and Mohit Aggarwal ruled that the concessional rate of GST is applicable only to the medicine or drugs, which are ready for administering in the human being or person. In the instant case, the applicant supplies bulk drugs to their customers and hence the said bulk drug becomes raw material to the said customers.
Therefore, AAR held that 5% GST is not applicable to the bulk drug Danuorubicin, Epirubicin, Idarubicin and Zoledronin Acid, in terms of List I to Entry No. 180 of Schedule I to the Notification No. 1/2017-Central Tax (Rate), dated June 28, 2017.
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