By Aparna. M – On April 11, 2023 6:45 pm – 2 mins read
The Supreme Court in a recent case, held that Dettol is a medicine and therefore 4% Value Added Tax is applicable under the Kerala Value Added Tax Act, 2003.
Siddharth Bawa, Advocate appeared for the appellant. C.K. Sasi ,Advocate appeared for the respondent.
The aforesaid appeal was filed by the appellant Reckitt Benckiser (India) Ltd.for determining the tax rate of Dettol Antiseptic Liquid under the Kerala VAT Act, 2003.
Appellant contented that ‘Dettol Antiseptic Liquid’ is correctly classifiable under Entry 36(8) (h) (vi) being medicaments corresponding to HSN Code 3004.90 of the III Schedule, and thus also subject to tax at the rate of 4%.
Counsel for the appellant submitted that,Dettol falls under HSN 3004 90 specifically incorporated in Entry 36(8)(h)(vi) of Schedule III, therefore Dettol is classifiable as a drug/medicine under Entry 36(8)(h)(vi) of Schedule III.
Further the counsel submitted that active ingredients of Dettol are Chloroxylenol IP, Terpineol BP, Alcohol Absolute IP (denatured) and it is an antiseptic having germicidal properties; it kills germs, bacteria and it prevents infection therefore it is applied on wounds, cuts, grazes, bites and stings and is used in hospitals for surgical use, medical use and midwifery, due to therapeutic and prophylactic properties.
Counsel for the respondent submitted that a medicament is an item used for therapeutic or prophylactic treatment for prevention and cure of diseases.The High Court has specifically found that the appellant has no case that Dettol is able to prevent or cure any disease and therefore has rightly held the Dettol is not a medicament. Therefore the Dettol would fall under residuary Entry.
After considering the contents of the single bench of the Justice M. R. Shah allowed the appeal of the appellant product Dettol would fall under Entry 36(8) (h)(vi) of Schedule III of the KVAT Act and shall be liable to be taxed at 4%.
Thereafter the bench observed that considering the dominant use of Dettol and the active ingredients of Dettol , it is used as an antiseptic and is used in hospitals for surgical use, medical use and midwifery due to therapeutic and prophylactic properties the same would fall under Entry 36(8) (h) (vi) as claimed by the appellant.To Read the full text of the Order CLICK HERE
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M/s Reckitt Benckiser (India) Ltd. vs Commissioner Commercial Taxes & Ors.
CITATION: 2023 TAXSCAN (SC) 146
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