LI Network
Published on: January 2, 2024 at 11:05 IST
The Authority of Advance Ruling (AAR) in Uttar Pradesh has ruled that F-18 drugs utilized for cancer diagnosis will be subject to an 18% Goods and Services Tax (GST).
The bench comprising Amit Kumar and Harilal Prajapati noted that F18 is a radioisotope while fluorodeoxyglucose (18F-FDG) is a compound. Despite meeting the conditions mentioned in Chapter 30 as a diagnostic reagent intended for patient use, these products, being radioactive and involving the radioisotope 18F, fall under classification heading 2844.
The applicant, involved in manufacturing drugs like 18F-fluorodeoxyglucose, 18F PSMA, and other radioactive compounds labeled with F 18 for cancer diagnosis, sought clarification on the classification and applicable GST rate. They contended that F18 should be classified under Chapter 3006 and taxed at 12% GST per Schedule II, Notification No. 01/2017-CT (Rate) dated June 28, 2017.
The query raised whether F-18 products should fall under HSN 30063000 and be taxed at 12% GST, or not, according to the applicant. They argued that these products, as diagnostic reagents for patient administration, should be categorized as “Opacifying preparations for X-ray examinations; diagnostic reagents designed to be administered to the patient” under heading 3006.
However, the AAR rejected this classification, opting instead for an 18% GST rate under HSN 2844. This ruling has significant implications for businesses dealing with radioactive compounds, providing a precedent for similar cases.
The AAR’s decision brings clarity to the classification of such products within the GST framework, ensuring a uniform approach.