The Gujarat Authority for Advance Ruling (AAR) has held that 5% GST is payable on beacon diagnostics’ test kits use to diagnose typhoid fever.
The bench of three diagnostic test kits manufactured by Beacon Diagnostics Pvt. Ltd., namely CRP Turbilatex Test Kit, HbA1c Test Kit, and Microalbumin Turbilatex Test Kit, fall under HSN Code 3002 and are liable to Goods and Services Tax (GST) at 5% under Schedule I of Notification No. 1/2017-Central Tax (Rate), dated June 28, 2017.
The applicant, Beacon Diagnostics, based in Navsari, Gujarat, is engaged in manufacturing diagnostic reagents and kits used for medical testing. The company sought an advance ruling on the correct classification and applicable GST rate for three of its products:
- CRP Turbilatex Test Kit – used for quantitative determination of C-Reactive Protein in human serum.
- HbA1c Test Kit – used for quantitative measurement of Hemoglobin A1c in human blood.
- Microalbumin Turbilatex Test Kit – used for measuring microalbumin levels in human urine.
All three kits work on the principle of agglutination reaction using latex particles coated with antibodies (antisera).
Beacon Diagnostics argued that the essential component of each kit is antisera, which constitutes the majority portion (65%–80%) of the kits. Since “antisera” falls under HSN 3002, the applicant contended that the diagnostic kits should also be classified there, not under HSN 3822 (which generally covers diagnostic reagents and kits).
They relied on earlier judicial precedents, including the Supreme Court’s ruling in Span Diagnostics Ltd. (2007), which held that diagnostic kits based on antisera are to be classified under HSN 3002 as “blood fractions.”
The department considered whether these kits could fall under HSN 3822, which covers diagnostic or laboratory reagents not specifically falling under Chapter 30. However, the applicant emphasized that HSN 3822 excludes reagents classifiable under HSN 3002.
The AAR noted Antisera are obtained from human or animal blood and used for both therapeutic and diagnostic purposes. Diagnostic kits, if their essential character is derived from antisera, must be classified under HSN 3002. The Supreme Court had already clarified that diagnostic kits derived from antisera are not to be shifted to HSN 3822 merely because they use latex or other mediums.
The Authority also referred to a similar ruling by the Maharashtra Appellate AAR in Accurex Biomedical Pvt. Ltd. (2022), which took the same view.
The Gujarat AAR held CRP Turbilatex Test Kit, HbA1c Test Kit, AND Microalbumin Turbilatex Test Kit are classifiable under HSN 3002 as diagnostic kits based on antisera and taxable at 5% GST under Entry 180 of Notification No. 1/2017-Central Tax (Rate).
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