Concessional rate of 5% GST is applicable only to the medicine or drugs, which are ready for administering in the human being or person, rather than for the drugs which becomes raw materials to the customers.

The Gujarat Authority for Advance Ruling has clarified that the concessional GST rate of 5% applies only to medicines and drugs that are ready for direct administration to humans. This ruling distinguishes between finished pharmaceutical products and the raw materials used in their manufacture. Therefore, drugs supplied as raw materials, rather than as ready-to-use medicines, do not qualify for the reduced tax rate.

GUJARAT AUTHORITY FOR ADVANCE RULING
GOODS AND SERVICES TAX
A/5, RAJYA KAR BHAVAN, ASHRAM ROAD,
AHMEDABAD – 380 009.

ADVANCE RULING NO. GUJ/GAAR/R/54/2020
(IN APPLICATION NO. Advance Ruling/SGST&CGST/2019/AR/55)
Date: 30.07.2020

Name and address of the applicant :M/s Sterling Biotech Ltd.,
Jambusar State Highway, Vill : Masar, Ta Padra, Vadodara.

GSTIN/ User Id of the applicant : 24AABCS1946H3ZG

Date of application :14.09.2018

Clause(s) of Section 97(2) of CGST / GGST Act, 2017, under which the question(s) raised. :a) Classification of goods and/or services or both.
b) Applicability of a notification issued under the provisions of the Act.

Date of Personal Hearing :02.07.2020 (Through Video Conferencing)

Present for the applicant : Shri Rakesh Modi

M/s. Sterling Biotech Ltd., Jambusar State Highway, Vill : Masar, Ta Padra, Vadodara having a GSTIN : 24AABCS1946H3ZG, is a company filed an application for Advance Ruling under Section 97 of CGST Act, 2017 and Section 97 of the GGST Act, 2017 in FORM GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the GGST Act.

2. M/s. Sterling Biotech Ltd. an applicant is engaged in the manufacture of pharmaceutical products viz. Bulk Drugs located at Village masar, Dist Jambusar in the state of Gujarat. Masa plant mainly manufacture bulk drugs which are consumed in manufacture of life saving drugs and medicaments for treatment of cancer, etc.

3. 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 28.06.2017 as well as State Notification and Integrated Tax Notification.

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