The Authority on Advance Ruling (AAR) Karnataka, ruled that Pharmaceutical Reference Standards (PRS) is not a diagnostic reagent and attracts 18% of IGST.
The applicant states that they are a science-based organization conceptualized to cater to the growing analytical and regulatory requirements of the Pharmaceutical Industries and to provide solutions to the new challenges in separations and purifications faced in the Pharmaceutical and Research Institutions worldwide.
The applicant inter-alia imports Pharmaceutical Reference Standards (PRS) from various official pharmacopoeias like US Pharmacopoeia (USP), European Pharmacopoeia (EDQM), British Pharmacopoeia (BP) and supplies them to all major pharmaceutical companies in India like Sun Pharmaceuticals Ltd., Torrent Pharmaceuticals Ltd., Lupin Ltd., Matrix Laboratories Ltd., Ranbaxy Ltd., Dr.Reddy’s, Aurobindo Pharmaceuticals Ltd., etc.
PRS is in the nature of Prepared Laboratory Reagent and is a substance of known purity which is intended to be used exclusively for a specified analytical calibrating and referencing purposes. PRS is not used for detection or diagnosis and is not to be used as a drug as clearly stated on the label or accompanying certificate or literature.
The drug manufacturing companies use these PRS in their laboratory tests on all drug substances for determining the purity of medicine and identification and quantification of pharmaceutical impurities applied
The ruling was made by Additional and Joint Commissioner, Harish Dharnia and Ravi Prasad on an application filed by M/s Chrochemie Laboratory PVT ltd.
The Authority observed that goods of HSN 3822 other than “diagnostic kits” or “diagnostic reagents” are but covered under schedule III and entry 453 because not covered under any specific entry of Schedule I or Schedule II schedule IV or Schedule V or Schedule VI
The Authority ruled that Prepared Laboratory Reagents or Pharmaceutical Reference standards are not diagnostic reagents are not covered under Entry No.80 of Schedule II Integrated Tax and is covered under entry no.453 of Schedule III of Integrated Tax (Rate) and attracts IOST at 18%.
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