Q1.

“MosquitoMos” case – whether a medicament or a cosmetic

“MosquitoMed” has classified “MosquitoMos” as a medicament and not a cosmetic. However, in

my opinion, “MosquitoMos” is a mosquito repellent and not a medicament.

The manufacturer has pitched the product as a mosquito repellent. This is not prescribed by
medical practitioners as a medicine and the sale of the product is not restricted to the
druggists/chemists. As per the common parlance test, “MosquitoMos” is identified as a
mosquito repellent by the market and the consumers. It must be noted that the consumers do
not refer to MosquitoMos as a medicine.

Further, the chemical ingredient test reveals that the product contains, an active ingredient -
DEET, which has characteristics for mosquito repellent. There is no clear evidence that the
product contains any chemical properties to treat against mosquito bites. Hence, based on
these 2 tests, the classification of the product is clear as a mosquito repellent cream. It should
not be classified as a medicament but as a cosmetic with GST applicable as 18%.

Q2. Discuss whether GST would be payable in following independent cases:

a) A Company Secretary makes payment of LLP Registration fees of Rs. 4,000/- on behalf
of their clients and charges the client his professional fee of Rs. 12,000/- along with
expenses of Rs. 2,000/- incurred in form of payment to Registrar of Companies

As per GST law, in case of value of supply of services for a pure agent, the expenses incurred
by supplier who is a pure agent, (in this case, a company secretary) are excluded from the value
of the supply. The pure agent as the recipient of the supply should be exempt from the
expenses of Rs 2,000 & registration fees. GST is payable only on Rs 12,000 on his professional
fees.

b) A company provides Subsidized Meal facility to employees. It pays Rs. 100/- per plate
to the caterer and deducts Rs. 20/- per plate from the employee’s salary

In case where an employer provides subsidised meals to its employees, the recovery of Rs 20
per plate from Employee is chargeable under GST regime at the market value. This is tagged as
an outward supply of food under GST Act, 2017. Even though, this activity is not a business-
related activity and there is no profit earned by the company, it will come under the purview of
“supplier”. In this view, company would be required to pay GST on the subsidised meal amount.