GST Rate on Freeze-Drying Machines Reduced to 18 Percent
Industrial freeze-drying machines fall under HSN 8419 and attract 18% GST instead of 28% from November 15, 2017.
- Ruling
- TSAAR Order No. 5/2018 Date. 02-07-2018
- Dated
- 02 Jul 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Company asked about the GST rate for industrial freeze-drying machines.
- Authority ruled freeze-dryers fall under HSN code 84198990.
- GST rate on these machines reduced from 28% to 18% from November 2017.
- Machinery treating materials via temperature changes qualifies for the 18% rate.
In short
A manufacturer of freeze-drying machines used in pharmaceuticals and food processing charged 28% Goods and Services Tax (GST) when the new tax regime started in 2017. In November 2017, the central government issued Notification No. 41/2017-Central Tax (Rate), which reduced tax rates on several types of industrial machinery. Following this notification, buyers asked to pay 18% tax instead of 28%. The company asked the tax authority to clarify the exact HSN code and applicable GST rate for its machinery.
What has changed
How it worked before
Before November 15, 2017, businesses generally charged 28% GST on industrial freeze-drying equipment, assuming it fell under the higher tax slab for unspecified machinery.
What has changed
The Telangana Authority for Advance Ruling (AAR) in TSAAR Order No. 5/2018 ruled that freeze-drying machinery falls under HSN heading 8419 (specifically 84198990) because it processes goods through temperature changes. Under Notification No. 41/2017-Central Tax (Rate), items under this heading qualify for an 18% GST rate (9% CGST + 9% SGST) starting November 15, 2017. This officially lowered the tax burden on purchasing these capital machines by 10%.
Who this affects
Manufacturers, suppliers, and buyers of industrial freeze-dryers, pharmaceutical processing machinery, and temperature-controlled food processing equipment.
An example
A machinery supplier in Gujarat manufactures specialized cooling equipment used for vaccine production. Before November 2017, they charged 28% GST on all client invoices. After the government issued Notification No. 41/2017-Central Tax (Rate), a client requested to pay 18% tax citing TSAAR Order No. 5/2018. This ruling indicates that if the machinery operates by changing temperature under HSN heading 8419, the correct tax rate is 18%, though the supplier must confirm this classification with their own tax office.
What you should do
If your business sells similar equipment, review your machine's technical process against HSN heading 8419. Remember that an advance ruling legally binds only the specific business that applied for it and its local tax officer. You cannot automatically apply this ruling to your own sales, so consult a tax professional or file your own advance ruling application if your tax officer demands a higher rate.
If you do nothing
Assuming this ruling covers your business without confirming your machine's exact technical classification creates significant tax risk. If a tax officer audits your business and decides your machine belongs under a different 28% tax entry, they will demand the unpaid 10% tax. You will also have to pay interest and penalties, which you may not be able to recover from your customers.
The terms explained
- HSN Code
- A standardized numerical code used globally to classify goods for tax calculation.
- Advance Ruling
- An official tax decision given to a specific business explaining how GST law applies to their particular product or service.
- Input Tax Credit
- The tax a business pays on purchases that it can deduct from the GST collected on sales.
The ruling in detail
Authority for Advance Ruling
M/s. Lyophilization Systems India Private Limited
TSAAR Order No. 5/2018 Date. 02-07-2018 · Telangana
Questions before the authority
- (i) The rate of tax applicable as on 15.11.2017 on the Lyophilizers- Machinery for the plant which is being cleared under chapter heading 8419.
Facts
The applicant manufactures Lyophilizers (freeze-drying machinery) primarily used in the pharmaceutical industry for producing vaccines and life-saving injectables, as well as in food processing. The machinery operates via cooling and vacuum pressure to remove moisture through sublimation, changing temperature during the process. Prior to 15.11.2017, the applicant paid GST at 28% (14% CGST + 14% SGST) as heading 8419 was not specified at a lower rate; however, following Notification No. 41/2017-Central Tax (Rate), customers insisted on paying 18% GST (9% CGST + 9% SGST).
Ruling
| Question | What the authority ruled |
|---|---|
| Applicable rate of GST as on 15.11.2017 on Lyophilizers cleared under heading 8419 | CGST 9% + TGST 9% Classified under tariff heading 8419 |
The Authority ruled that Lyophilizers are classifiable under **Tariff heading 8419** (specifically 84198990) of the GST Tariff. Consequently, effective 15.11.2017, the tax rate leviable on the supply of Lyophilizers under heading 8419 is **9% CGST + 9% SGST** (total 18% GST).
Reasoning
The Authority analyzed the technical operation of Lyophilizers and held that freeze-drying is a process involving a change of temperature (cooling, drying, condensing) for material treatment. Applying Section XVI and Chapter 84 notes of the Customs Tariff Act, 1975, the goods are classifiable under Tariff item 84198990. Under Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017, Entry No. 320 of Schedule III was amended to cover machinery or plant under heading 8419 used for treatment of materials by temperature change at a rate of 9% CGST and 9% SGST.
Provisions relied on
- Section 97(1) of TGST Act, 2017
- Rule 103 of CGST/TGST Rules, 2017
- Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017
- Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017
- Chapter Heading 8419 / Tariff Item 84198990 of Customs Tariff Act, 1975
For the practitioner
This ruling confirms that industrial Lyophilizers (freeze-dryers) fall under **HSN Heading 8419** and qualify for the reduced rate of **18% GST** (9% CGST + 9% SGST) under Schedule III, S.No. 320 post the November 2017 amendment. It provides clarity for pharma and capital equipment manufacturers regarding the correct classification and rate reduction under Notification No. 41/2017-CT(R).
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/tsaar_05-2018_telangana.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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