Modern HIV Diagnostic Kits Eligible For Customs Duty Exemption and Concessional 5% IGST: CESTAT
Pranav B Prem
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that modern HIV diagnostic kits imported by Hemogenomics Pvt. Ltd. are entitled to full exemption from Basic Customs Duty (BCD) and concessional 5% IGST. The Tribunal emphasized that the diagnostic kits, though technologically advanced, serve the same purpose as traditional antibody detection kits and thus fall within the scope of the exemption notification.
The bench, comprising Justice Dilip Gupta (President) and Technical Member Hemambika R. Priya, observed that the diagnostic kits in question—Procleix Ultrio Plus Assay Kits and Procleix Ultrio Elite Assay Kits—are multiplex nucleic acid amplification tests (NAAT) used for detecting HIV, HCV, and HBV in blood and plasma samples. These kits are widely used across premier medical institutions in India such as AIIMS, PGI Chandigarh, and CMC Vellore.
The appellant had imported these kits from M/s Grifols (HK) Limited and claimed ‘Nil’ BCD under Serial No. 167(A) of Notification No. 50/2017-Cus and 5% IGST under Serial No. 180 of the IGST Rate Notification (01/2017). However, the department rejected these claims on the grounds that the kits were not used to detect HIV antibodies—as specifically mentioned in the exemption notifications—but were NAAT-based tests to detect HIV RNA, and hence were classifiable under CTI 3822 00 90.
The adjudicating authority and the Commissioner (Appeals) had both held against the appellant, stating that the impugned kits do not detect HIV antibodies, nor are they classified as diagnostic kits for HIV antibody detection by the National AIDS Control Organisation (NACO). It was also concluded that the kits were not eligible for exemption, both under BCD and reduced IGST, since they were not serological tests but nucleic acid-based.
However, in its detailed analysis, the Tribunal disagreed with this restrictive interpretation. The bench noted that diagnostic science has evolved significantly since HIV antibody tests were introduced in the 1980s, and newer technologies such as NAAT are now considered vital in the early and accurate detection of HIV infections, especially in vulnerable patients, including infants and during the window period when antibodies are not yet detectable.
The Tribunal observed: “Purposive interpretation has to be extended to the entry in the Notification so as to give the benefit of duty not only to diagnostic kits for detection of HIV antibodies but also to other technologically advanced diagnostic kits used for detection and prognosis of HIV, as they serve the same purpose.”
The bench emphasized that the objective behind such exemptions is rooted in public health policy—to curb the spread of HIV and make advanced diagnostic tools accessible at lower costs. It was highlighted that the imported kits play a critical role in blood screening at hospitals and blood banks, thereby supporting the National AIDS Control Programme.
Also Read: CESTAT: Drawback Not Permissible When Refund Exceeds Market Value of Goods
Rejecting the department’s plea for strict interpretation of exemption notifications, the Tribunal invoked the principle laid down by the Supreme Court in Mother Superior Adoration Convent [2021 (376) E.L.T. 242 (S.C.)], asserting that beneficial exemptions meant to serve public interest should be interpreted liberally. Accordingly, the Tribunal allowed the appeal and set aside the order passed by the Commissioner (Appeals), holding that the diagnostic kits imported by Hemogenomics Pvt. Ltd. are eligible for full customs duty exemption and concessional IGST at 5%.
Appearance
Counsel For Appellant: Sandeep Chilana, Shri Priyojeet Chhatterjee, Shri Snehil Sharma and Shri Vindaya Agarwal
Counsel For Respondent: S.K. Rahman, Authorized Representative
Cause Title: M/s. Hemogenomics Pvt. Ltd. Versus Commissioner of Customs (Appeal)
Case No: Customs Appeal No. 55291 OF 2023
Coram: Justice Dilip Gupta [President], Hemambika R. Priya [Technical Member]
