Tamilnadu AAR: PSA Medical Oxygen Generation Plant Attracts 18% GST

The Tamil Nadu Authority for Advance Ruling (AAR) ruled that the Pressure Swing Adsorption (PSA) medical oxygen generation plant attracts 18% GST.

M/s Freeze Tech Innovations (applicant) is engaged in manufacturing the PSA medical oxygen generation plants. Before dealing with the customers, the applicant approached AAR to know the applicable HNS Code and GST rate on their product.

The applicant explained that a plant is manufactured and assembled in-house and is installed at the client’s place. Once the assembling is completed, the PSA tank will be filled with a zeolite molecular sieve and activated alumina mounted in a SKID. The valves will be connected in the final stage, and the applicant will check the pipelines with leak detectors. Also, the pipelines are checked with the 12 bar Hydro pressure test for safety purposes.

The AAR observed that the PSA plant is not in the category of the appliances used for ozone therapy, oxygen therapy, and artificial respiration included in the CTH 901920. Further, the AAR observed that the product’s function is the generation of oxygen gas. Also, the plant works on the principle of Pressure Swing Adsorption, which is used for separating oxygen from compressed air.

Hence, the AAR concluded that the PSA medical oxygen generator supplied by the applicant is an air separator and not a therapeutic device. Therefore the product is to be classified under CTH 8421. The Coram of AAR has ruled that the ‘PSA medical oxygen generation plant’ is classifiable under CTH 8421, and 18% GST is applicable.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in