"WEST BENGAL APPELLATE AUTHORITY FOR ADVANCE RULING AT 14, BELIAGHATA ROAD, KOLI(ATA-700015 Before: Mr. A.P.S Suri, Member NIs. Snraraki Mahapatra, Flember In the matter of Appeal Case itlo. 08 iWBAAARu'Appeallz}l 9 datedr 29.04.2Al9 -And- ln the matter of, An Appeal filed under Section 100(1) of the West Bengal Goods and Services Tax Act, 20171 Centrai Goods and Services Tax Act, 2017,by Eskag Pharma Pvt. Ltd., AG-i 12, 8'h Floor, Suite No. 804, Baishakhi, Salt Lake , Sector-ll, Kolkata- 700 091 Present for the Appellant: Sri Dipankar Majumdar, Advocate & Ms Riya Bhattacharjee, Advocate Present for the Respondent: None Matter heard on: 03. A7 .ZAW Date of Orc]er: 23.A7 .2A19 This Appeal has been filed by Eskag Pharma Pvt. Ltd. (hereinafter referred to as \"the Appellant\") on 29.04.2019 against Advance Ruling No. 46l iBAAR/2018-19 dated 26.03.2019, pronounced by the West Bengal Authority for Advance Ruling (hereinafter referred to as the WBAAR) in the matter of Eskag Pharma Pvt. Ltd. Eskag Pharma Pvt. Ltd located at AG-I12, 8th Floor, Suite No. 804, Baishakhi, Salt Lake Sector-Il, Kolkata- 700 091 holding GSTIN I9AAACE5646H|ZI and is stated to be a manufacturer of pharmaceuticals, active pharmaceutical ingredients (APIs), medicaments, etc. 3. The Appellant sought an advance ruling under section 97 of the West Bengal Goods and Services Tax Act, 20171 the Ceiitral Goods and Services Tax Act,2017, (hereinafter l. 2. Page 1 of 6 Sl. NIo. Name of the product Composifion 1 Biogut capsule Streptocuccus faecalis 30 million Clostridium Butyricum 2 million Mesentericus I rnillion Lactic Acid Bacillus 50 million 1 .(- Folcovit capsule Lactot\"errin 20mg Bacillus coagulans 2.A billion spores Saccharomyces boulardii A,25 billion cells Folic acid 1.5 mg Vitamin 812 15 mg Sodium selenite equ to elemental selenium 40 mcg Zinc ascorbate equ to elemental Zinc l2 rng 3 Folcovit Distab Bacillus Coagulans I .25 billion spores Folic acid 1.5 mg Vitamin B 12 15 mcg 4 Myova/Myowin tablet Myo -Inositol 550 rng D-chiro-Inositol I 3,8 mg L-Methylfoate calcium I .0 mg Chromium I00 mcg (As chromium picolinate) Vitamin D3 1000 IU 5 Candyflora Tablet Lactobacillus reuteri 200 million CFU Lactobacillus rhamnosus 50 million CF{.J Bifidobacteriurn longurn 50 Million CFU 6 Carisma Tablet Carica Papaya Extract I 100 mg Excipients Q.S. 7 Lactolite sy'rap Sodium chloride 52A mg Potassium Chloride 300 mg Sodium Citrate 580 mg Dextose (anhydrous) 2.7 mg Purified Water, Sucrose, Dextrose Preservative I Lacolite Z Sachet Sodiurn chloride IP 0.52 gm Potassium Chloride IP 0.3 gm Sodium Citrate IP 0.58 gm Dextrose (anhydrous) lP 2\"7 mg Zinc sulphate monohydrate 10.98 mg Eqr,. to elernental zrnc 4 mg Bacillus coagulans 0.5 billion spores Lactobacillus acidophilus 0.25 billion cells Lactobacillus rhamnosus 0.25 billion cells Excipients q.s. collectively referred to as \"the GST Act\") on classification of 15 products manufactured by the Appellant which are as follorvs: Page 2 of 6 9 Biogut Dry Syrup E,ach 5 ml contais probiotics 1 .25 bilion cells strains 10 Enterobiotic Dry Syrup Lyophilizes saccaromyces Boulardii 2.5 billion cells n Gutclausy Dry Syrup Each 5 ml contains Bacillus clausii 2 billion cells t2 Evaday Capsule Evening primrose oil, Isoflavonoids, Vitamin E Acetate, Vitamin C,, Vitamin 86., Cynocobalamide, Niacinamide, Folic acid, Dibasic Calcium Phosphate,Magnesium sulphate, Zinc Sulphate Monohydrate, biotin t3 Zir:;Jr. Ascorbate (Dry syrup) Each I ml contains Zinc Ascorbate Eqv. To elemental Zinc 20mg t4 Zink ascorbate (syrup) Each 5ml contains Zinc Ascorbate Eqv. To elemental Ztnc 20mg t5 Lactoin Drop Each I ML contains Lactase Enzyne 600 units 1. The WBAAR, out of the above l5 products classified l2 products (Serial nos. 2 to l3 of tlre above table) under HSN 2106, and taxable under Sl. No. 23 of Schedule III of Notification no. ll20I7-C.T (Rate) dated 28-06-2017 under the Central Goods and Serr,\"ices Tax Act, 2017 & Notifisation No. I125-FT dated 28-06-2A17 under the West Bengal Goods and Services Tax Act, 2017, as amended vide Notification no. 4ll20l7- C.T (Rate) dated 14-11-2017 under the Central Goods and Services Tax Act, 2017 & Notification No. 2019-FT dated l4-ll-2017 under the West Bengal Goods and Services Tax Act, 2017, (hercinafter referred to as \"the Rate Notification as amended\"). The WBAAR refrained from classiflng the remaining 3 products in the light of the obsenation of the West Bengal Appellate Authority for Advance Ruling (hereinafter referred to as the WBAAAR) in the matter of Akansha Hair & Skin Care Herbal unit Pvt. Ltd. (Appcal Case No. 2NlBAJq.r{ILAppcal/2018 datcd 0l-08-2018). The Appellant has filed the instant Appeal against the above Advance Ruling with the prayer to set aside/ruodify the impugned Advance Ruling passed by the WBAAR or pass any such further or other orders as may be deemed fit and proper in the facts and circumstances of the case on rhe following grounds: (i) The WBAAR erred in law by accepting the Appellant's application partially. The issue of classitlcation of products ; Biogut Capsule (Serial no. 2), Zinc Ascorbate - Syrup (Serial no. 14) and Lactoin Drop (Serial no. l5) have not been answered. The WBAAR while classifying the products relied solely on the detailsi inscriptions mentioned on the packages of the products and has ignored the usage of the products. The affixation of label \"Not for Medicinal Use\" on packaging of the products in question is as per regulations issued by the Food Safety and Standards Authority of India (FSSAI) undcr thc Food Safety and Standards Act, 5. (ii) Page 3 of 5 b. 2006. This is just a statutory regulation and has no bearing on the usage of the products. The products on rvhich classification has been sought are not in the nature of fortified foods and are not health supplements. (iii) Tlte WBAAR relied on the judicial obseryation made on the rueaning and scope of the tenn \"Medicament\" in the matter of Shree Baidyanath Ayurved Bhavan Ltd. v Collector of Central Excise, Nagpur U996 (83) E.L.T. 492 (S.C.)l where the Apex Court laid down the o'common parlance\". The WBAAR erred in its judgmcnt on this issuc. Thc dcfinition of \"drugs\" or rcfcrral of thc products under the Drugs and Cosmetics Act is not applicable for determination of classification uuder the GST Act. In ordinary course, the test to identify whether a product is a medicament or not, is whether the said product: (a) Is prcscribed by a Medical Practitioner, and (b) Is used for a limited period of time. During the course of hearing the Appellant reiterated the points as stated in the Grounds of Appeal. The Appellant sffessed on the description of goods in serial no. 63 of the Rate Notification where taritf item 3004 is \"Medicaments\" which consists of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including traus-dertnal adrninistration) and includes Ayuledic, Unani, Homeopathy, Siddha or Bio-chemic systems of medicaments. The Appellant submitted relevant cxtracts of the Indian Pharmacopoeia, 2018, prcscriptions issucd by mcdical practitioncrs prescribing the products in question, invoices issued by various pharmacists, certificate issued by Dr. Agnik Pal of JNI iI Hospital, Kalyani, stating that the products in question are used as medicaments. Further the Appellant sffessed on the judgement of the Apex Court in the matter of Kalyani Breweries Ltd. vs Assistant Collector of Customs, Calcutta [2001(134) ELT l2(SC)]. The Appellant also submitted that stickers on its products proclaiming HealthiDietary Supplements\", \"Health Drinks\" and \"Not for Medicinal Use\" have been pasted to meet procedural requirements only and nothing clse. Thc prcscription and usc of thc products themsclvcs arc altogethcr diffcrcnt. The matter is examined and written and oral submissions made before us are considered. The moot questior is whether the products for which classification has been sought fall under the category of dietary/health supplement or they are drugs and medicines as claimed by the Appellant. Central Drugs Standard Control Organisation (CDSCO) is a regulatory body for Indian pharmaceuticals and medical devices, set up under the Ministry of Health and Family Welfare and is responsible for approval of drugs, conduct of clinical trials and laying down the standards for drugs and overseer aspects of safety, rights and well being of 7. 8. Page 4 of 6 9. patients. As per provisions of sub-section (b) of section 3 of the Drugs and Cosmetics Act, 1940, \"drug\" includes inter alia all medicines for intemal or external use in human beings or animals and all substances intended to be used for or in the diagnosis, ffcatmcnt, mitigation or prevcntion of any disease or disorder in human bcings or animals. Further, sub-section (c) of section 18 of the said Act prohibits manufacture, stocking or sale of any drug without a license procured under the Act. ht coutse of hearing the Appellant stated that he does not hold a drug license under the Drugs and Cosmetics Act, 1940. On being asked as to why the Appeilant did not obtain drug license, Appellant's representative stated that obtaining the same is a lengthy and difficult process and it is easier to get license under Food Safety and Standards Authority of India (FSSAI). FSSAI is an autonomous body also created under the Ministry of Health and Family Welfare and is responsible for protecting and promoting public health through the regulation and supervision of food safety. Notification No. 1-4iNutraceutical/FSSAl- 2013 dated 23.12.2016 (hereinafter referred to as \"the Regulations\") issued by FSSAI covcr cight catcgorics of functional food, namcly: (i) Health Supplements, (ii) Nutraceuticals, (iii) Food for Special Dietary Use, (iv) Food for Special Medical Purpose, (v) Speciality Food containing Plant or Botanicals, (r.i) Food containing Probiotics, (vii) Food containing Prebiotics, and (viii) Novcl Food The Appellant is a license holder under FSSAI and as per the Appellant's submission and observations of WBAAR, the products have stickers pasted on packaging proclaiming \"Health/Dietary Supplements\", \"Health Drinks\" and \"Not for Medicinal Use\". This is as per the Regulations set by FSSAI. It is noted that Food for Special Medical Purpose and Food for Special Dietary Use are intended to be used only under medical advice [Regulations 3 & 8]. The general requirement [Regulation 2(dxii)]of the Regulations specifies that the articles of food sold in capsules, tablets, s)irups, hard or soft or vegetarian, shall cornply with the general rnonograph and quality requirements specified for them in Indian Pharmacopoeia and also, the quantity of nutrients added to the articles of food shall not exceed the recommended daily allowance as specified by the Indian Council of lVledical Research and in cases such standards are not specified the standards laid down by intemational fbod standards body, namely, Codex Alintentarius Commissiou, shall apply. Health supplements as per Regulation 6 of FSSAI, shall contain concentrated source of one or more nutrierfis, namefi; amino acids, enzvmes, minerals, proteins, v-itamins, ather 10. 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