AAAR: GST Exemption Not Available Hearing Aid Parts and Accessories

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).

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