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The sale of Micafungin sodium by the DTA unit is not entitled for concessional rate of GST at the rate of 5%

Rate of Tax — The applicant (DTA unit) is engaged in manufacture of generic active pharmaceutical ingredients (APIs), novel biologics, biosimilar insulins and antibodies. The applicant purchases “Micafungin Sodium” from the SEZ unit of M/s. Biocon, who imports and sells the same, after processing, as bulk drug. The applicant sells the bulk drug, so purchased, to third party customers, who in turn uses for preparations of injections. In view of the above, the applicant sought for advance ruling in respect of the following question: Whether the sale of Micafungin sodium by the DTA unit of the applicant is covered under Serial No.114 of Entry No.180 of the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 and therefore, is leviable to GST at the rate of 5%? Held that— The concessional rate of GST is applicable only to the product Micafungin Sodium which is ready for administering by way of injection. In the instant case the applicant supplies bulk drug Micafungin Sodium to their customers and hence the saiddrug becomes raw material to the said customers. The applicant contends that their bulk drug is essential for 'Micafungin Sodium for injection’ and hence their bulk druggets covered under the entry for concessional rate of GST. The entry would have been'Micafungin Sodium’, had the intention of the Government been to extend the benefit of concessional rate to the bulk drugs/raw material. Therefore 5% GST is not applicable to the bulk drug Micafungin Sodium, in terms of SI.No.114 of List I to Entry No.180 of Schedule I to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017. — Biocon Limited (Dta), In Re… [2020] 24 TAXLOK.COM 004 (AAR-Karnataka)