Medical Covers for Ultrasound and Laparoscopy Classified as 'Accessories', Taxable at 18% GST: AAR [Read Order]

The West Bengal Authority for Advance Ruling [AAR] has made an important ruling on the classification and applicable rates of various types of plastic medical disposables under HSN codes. The AAR has made a distinction between generic protective wear and special purpose equipment intended for medical equipment accessories.

The applicant company Hi Care Remedy Private Limited is a Central Drug Standard ControlOrganisation [CDSCO] approved manufacturer of medical disposables such as sterile Ethylene Vinyl Acetate [EVA] gloves, aprons, and various types of probe and camera covers for Ultrasound and Laparoscopy.

These are made from polymer-based materials such as EVA and LDPE and are supplied only to healthcare institutions for infection control purposes. The applicant company sought a ruling to shift these items from a generic plastic product to specialized medical items.

The applicant contended that the essential character of the products is based on their medical function and sterilization processes. They argued that the probe covers that are used for Ultrasound and Laparoscopy, are accessories for medical equipment falling under HSN 9018, while the aprons and drapes are medical garments falling under HSN 6210.

The Revenue contended that the products do not fall under the category of instruments and appliances as per HSN 9018. Further, they contended that the products are made of plastic and not textile fabric.

The Bench consisting of Members Shafeeq S and Jaydip Kumar Chakrabarti observed that though the products are being used in healthcare services the composition of the material is a deciding factor. The AAR held that the specialized covers are being used as accessories for the equipment.

Therefore, the covers thag are being used for Ultrasound and Laparoscopy purpose are classified under

HSN 90330000 (12% GST) as they are being used as accessories for Chapter 90 equipment. However, the Authority rejected the classification of the product under the tariff item garment.Instead, the product is classified under HSN 3926 (12% GST) as the product is plastic.

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