The Bangalore Bench of Appellate Authority for Advance Ruling (AAAR) held that Goods and Service Tax (GST) exemption wouldn’t be available on the parts and accessories of hearing aid.
M/s Sivantos India Private Limited (appellant) was engaged in the business of hearing aids and their accessories and parts. The appellant had sought a ruling from Authority for Advance Ruling (AAR) regarding the following:
- The classification of the parts and accessories solely with the hearing aids and to determine the tax rate, and
- Whether the hearing aid parts and accessories fall under GST exemption or not?
The AAR ruled that the hearing aid parts and accessories attract 18% GST and the appellant had been charging the same since the ruling.
Further, the appellant approached the AAAR and submitted that:
- Entry No 142 of notification no: 2/2017 Central Tax (rate) excluded the hearing aids, and such an exception would also include the parts and accessories of the hearing aid.
- Even if the exemption is unavailable, the tax rate would be 12% instead of 18%, as ruled by the AAR.
The Bangalore Bench of AAAR held that the description of goods in entry Sl.No 221 of Schedule II or 255A of Schedule I does not include the parts and accessories of hearing aids. Hence, the hearing aids parts and accessories would not be taxable at 12%.
Therefore AAAR upheld the AAR ruling that:
- The parts and accessories of hearing aids falling under tariff item 9021 90 10 are not entitled to exemption under entry Sl.No 142 of notification no 2/2017 Central-Tax (Rate), and
- They attract 18% GST in terms of entry Sl.No 453 of Schedule III of notification no: 1/2017 Central Tax (Rate).
For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@clear.in
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.
