In Brief
The State of Andhra Pradesh challenged whether Medical Oxygen IP and Nitrous Oxide IP should be taxed under Entry 88 of the Value Added Tax Act (at 4–5%) or as unclassified goods (at 12.5–14%). The Supreme Court held that both products fall within the definition of 'drugs and medicines' under the Drugs and Cosmetics Act, 1940, and are taxable under Entry 88 at the lower rate. Medical Oxygen with 99.9% purity is included in the Indian Pharmacopoeia and National List of Essential Medicines; Nitrous Oxide serves as an anesthetic in surgery. Both have curative and medicinal properties. The Court dismissed the State's appeal, confirming that these substances are medicines as understood in law and commercial practice.
The lawyer headnote and full judgment text are available to registered users.