AAR: GST Exemption Available for Hearing Aids Not Its Accessories

A person shall not be required to file GST on a hearing aid. But a person is obligated to pay the 18% GST rate for the parts and accessories. The rate is being made consistent by Karnataka’s Authority for Advance Rulings (KAAR).

Experts recommend businesses for opting for the correct HSN (Harmonised System of Nomenclature) to avoid any dispute with the tax authorities.

Asked Questions

Bengaluru-based Sivantos India Pvt. Limited, in the business of trading hearing aids and their parts and accessories to the domestic market, made by the overseas parent company, which the petitioner imported and would be usable only with the hearing aids. Before KAAR it has been moved to three questions.

The first is the parts and accessories for the hearing aids does categorize in which class. Second, what shall be the tax rate levied on the supply of these parts and accessories the third is if these parts and accessories would get exempted by virtue of the exemption for the hearing aids.

An 18% GST on the parts and accessories is being levied to the applicant as of the date. But it specified the mentioned parts and accessories. But it specified that the mentioned parts and accessories would be made via the parent firm to make them effective for the use of hearing aids with no additional alternate uses, therefore are for the only use of hearing aids, and as per that they would get privileged “classifiable under heading 90219010 and are exempted from GST in terms of SI.No. 142 of Notification 2/2017-Central Tax (Rate) dated June 28, 2017.”

No Exemption on the Parts and Accessories

Within the points and oppositions KAAR mentioned that the same would be transparently proved from entry no 142 the mentioned entry covers exclusively goods explained as “hearing aids” and not the “parts & accessories of the hearing aids”. Hence “parts & accessories of the hearing aids”. Thus “the entry is not applicable to the instant case,” 18% shall be the GST tax rate applicable on the supply of these parts and accessories of hearing aids.

Tax experts mentioned that the ruling of AAR is clarificatory in nature. Thus through the implication would not be liable for exemption which is available for hearing aids and would be applicable for 18% GST. “Classification of goods continues to be a vexed issue under the GST laws and the supplier of such commodities needs to be very careful while selecting the appropriate category or HSN code,”