Diagnostic Kits Imported Not Eligible for BCD Exemption Due to Erroneous Classification: CAAR [Read Circular]

The New Delhi Bench of Customs Authority for Advance Ruling (CAAR) had determined that imported Diagnostic kits were not eligible for Basic Customs Duty (BCD) exemption based on an erroneous tariff classification.

The Applicant, QIAGEN India Private Limited, engaged in the manufacturing and supply of diagnostic reagents, kits, and instruments for medical testing, academics and pharmaceutical research, filed an application before CAAR seeking an advance ruling on the classification and eligibility for duty exemption of certain imported diagnostic kits.

The application sought clarity on the appropriate Customs Tariff Heading and the applicability of Basic Customs Duty exemption under Notification No. 45/2025-Customs.

The CAAR, after considering the application filed by the applicant, pronounced its ruling dated 24.10.2025 whereby the ruling classified the imported diagnostic kits under Customs Tariff Heading (CTH) 38221990. The kits were deemed ineligible for exemption from Basic Customs Duty under Notification No. 45/2025-Customs.

The Applicant submitted that the Impugned Ruling was erroneous, arbitrary, and contrary to the established principles of customs law and interpretation of exemption notifications. The classification adopted by the CAAR was flawed, and the denial of exemption was based on a restrictive reading that overlooked the true nature, composition, and intended use of the diagnostic kits.

The CAAR had adopted an unduly restrictive, hyper-technical, and literal interpretation of Notification No. 45/2025-Customs, thereby defeating the very legislative intent behind providing duty exemptions for critical scientific and diagnostic inputs. The absence of a specific entry for "diagnostic kits containing Bovine Serum Albumin" did not preclude the benefit when the core component, Bovine Serum Albumin, is a recognized and often exempted biological material, and the kits themselves serve a vital public health function.

The Authority had acted arbitrarily and discriminatorily by not adequately distinguishing the applicant's diagnostic kits from other similar biological reagents or research materials that routinely receive duty exemptions under the same or analogous notifications.

“It appears from the documents and submissions on record that the diagnostic kits proposed to be imported by the Applicant contain Bovine Serum Albumin along with other reagents and constituents. Thus, the composition and essential nature of the impugned goods are materially distinct.”

The Questions raised by the applicant were, firstly, Whether the diagnostic kits imported by the Applicant are classifiable under CTI 38221990? and secondly, Whether the kits imported by the Applicant eligible for exemption from Basic Customs duty under Entry 102 of Notification No. 45/2025-Customs dated 24.10.2025 read with S. No. 9 of List 3 of same notification, available to "Diagnostic Kits" containing BSA?

Thus, the Authority ruled that the kits imported were not eligible for exemption.

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