18% GST Applicable On F-18 Drug Used For Cancer Diagnosis: AAR

Lucknow: The Uttar Pradesh Authority of Advance Ruling (AAR) has held that 18% GST is applicable on F-18 drugs used for cancer diagnosis.

The bench of Amit Kumar and Harilal Prajapati has observed that F18 is a radioisotope and fluorodeoxyglucose (18F-FDG) is a compound. The products being radioactive and compounds of the radioisotope 18F merit classification under heading 2844 only, although they satisfy the condition mentioned in Chapter 30, i.e., a diagnostic reagent designed to be administered to the patient.

The applicant is engaged in the manufacture of pioneer drugs labelled as  [18F]Fluorodeoxyglucose,  18F PSMA, 18F DOPA, and many more radioactive compounds labelled with F 18. F18 compounds are radioactive isotopes used as diagnostic reagents, primarily for the diagnosis of cancer. It is also used in cardiology and neurology. As per the applicant, the F18 is classifiable under chapter heading 3006 of the HSN, leviable to 12% GST, in terms of entry No 65 of Schedule II of the Notification No 01/2017-CT (Rate), dated June 28, 2017, read with the corresponding rate notification issued under the UPGST Act, 2017.

The applicant sought the advance ruling on the issue of whether the F-18 products would be classified under HSN 30063000, leviable to GST at the rate of 12%, in terms of entry no. 65 of Schedule 11 of Notification No. 01/2017-CT (Rate), dated June 28, 2017, issued under the CGST Act, 2017, read with the corresponding rate notification issued under the provisions of the UPGST Act, 2017, or not.

The appellant has submitted that the product in question, being diagnostic reagents to be administered to the patients, merits classification under heading 3006. “Opacifying preparations for X-ray examinations; diagnostic reagents designed to be administered to the patient.”.

The AAR has rejected the applicant’s classification under HSN 30063000 and imposed an 18% GST rate under HSN 2844. The decision is crucial for businesses dealing with radioactive compounds, setting a precedent for similar cases. The clarity provided by the AAR ensures a standardized approach to the classification of such products under the GST regime

Applicant’s Name: IBA Molecular Imaging (India) P. Ltd.

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