Home GST WBAAR confirms 12% GST on Ayurvedic Patent and Proprietary Medicine

WBAAR confirms 12% GST on Ayurvedic Patent and Proprietary Medicine

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WBAAR confirms 12% GST on Ayurvedic Patent and Proprietary Medicine

WBAAR confirms 12% GST on Ayurvedic Patent and Proprietary Drugs

The West Bengal Authority of Advance Ruling (AAR West Bengal) within the matter of Indranil Chatterjee has levied 12% GST on Ayurvedic Patent and Proprietary Drugs.

The applicant intends to supply JAC OLIVOL BODY OIL categorized as an Ayurvedic patent and proprietary Drugs and inter alia the applicant is within the superior levels of coming into in to contract manufacturing settlement with the commerce identify homeowners of the stated product.

The Appellant sought an advance ruling underneath part 97 of the West Bengal Items and Providers Tax Act, 2017 and the Central Items and Providers Tax Act, 2017, (hereinafter collectively known as “the GST Act”) in search of as to the classification of the particularly JAC OLIVOL BODY OIL which as per the appellant is classifiable underneath HSN 3004 as a medicament attracting GST on the price of 12% (6% CGST and 6% WBGST).

Within the prompt case, it’s pertinent to consult with the related portion of the judgment handed by the Hon’ble Supreme Courtroom of India within the case of Commissioner of Central Excise vs. Baidynath Ayurwed Bhawan Ltd, as already referred to in para 4.

Once more, in Alpine Industries vs. Collector of Central Excise, New Delhi, [(2003) 3 SCC 111], the Hon’ble Supreme Courtroom has noticed:

Any subsidiary therapeutic or prophylactic use of the product wouldn’t change its nature as “Hair oil”, if within the widespread parlance, it’s handled as a beauty.

Thus, your complete challenge of whether or not the moment product is to be categorized as a beauty or a medication primarily rests on the dual checks as referred to in para 4.

The appellant has submitted tender copies of The Ayurvedic Pharmacopoeia of India, Half I Vol. I and Half I Vol. II printed by the Division of Ayush, Ministry of Well being and Household Welfare, Authorities of India as annexures to his extra submission wherefrom it seems that numerous elements of the moment product i.e. Haridra, Manjistha, Arjuna, Daruharidra, Karpoor, Neem Oil and so forth. are lined underneath such Ayurvedic Pharmacopoeia of India as Ayurvedic elements.

Now, comes the primary leg of the afore-stated ‘twin check’ i.e. whether or not in widespread parlance the merchandise is accepted as a medicament?

Taking the instance of Haridra or Turmeric – the identical items are used for therapeutic or prophylactic functions however on the identical time it’s extensively used throughout India as a spice and condiment being one of many main elements of cooking. Equally, Karpoor or Camphor not solely has its makes use of to deal with pores and skin circumstances, enhance respiratory perform, and relieve ache but in addition as an insect repellent and furthermore for the needs of puja and aarti. So, right here naturally the query comes, what’s the identification of those items within the minds of normal folks in widespread parlance? As for instance, The Ayurvedic Pharmacopoeia of India, Half I Vol. I and Half I Vol. II as referred to by the appellant even have entries like Atasi or Linseed whose oil is primarily utilized in artists’ oil paints, Dhanyaka or Corriander, Jatiphala or Nutmeg and Hingu or Asafoetida that are extensively utilized in cooking, Aksoda or Walnut and Dadima or Pomegranate that are generally savoured as fruit and nut, Iksu or Sugarcane which is especially used for the manufacturing of sugar all by the world.

The appellant whereas presenting his case earlier than this Bench argued that in most a part of our nation, folks have been making use of mustard oil to maintain the pores and skin hydrated however that doesn’t make mustard oil a beauty product.

In an analogous line, whether it is requested whether or not in widespread parlance, whether or not making use of mustard oil to maintain the pores and skin hydrated makes it a medication, it can land into a solution as per widespread parlance that mustard oil is primarily a cooking medium.

The appellant has said that the moment product can be utilized for treating minor burns and prevents blisters. Now, in mild of ‘widespread parlance’, if we ask – what would be the requirement of somebody in case of treating a minor burn – an anti-burn ointment or an prompt product, the reply would are likely to the previous choice.

Now, the difficulty of therapeutic i.e. regarding the therapeutic of illness or prophylactic i.e. supposed to stop illness of the product is available in query. Additionally, a sound query comes relating to the difficulty of treatment vs. care. As submitted by the appellant, Jac Olivol Physique Oil has sure skincare properties. It may be utilized in winter for curing dry pores and skin and likewise has its use for curing physique aches. Now, dry pores and skin can happen usually on account of lack of pores and skin moisture within the winter season or misuse of exterior brokers like cleaning soap. On the identical time, it will probably happen on account of pores and skin illnesses like atopic dermatitis (eczema) or psoriasis. Now, as everyone knows any body-oil like mustard oil, coconut oil or olive oil has a pure property to retain pores and skin moisture ensuing within the minimization of dry pores and skin. However that doesn’t needed suggest that mustard oil, coconut oil or olive oil can treatment pores and skin illnesses like eczema or psoriasis. In the identical means, as claimed by the appellant, the product Jac Olivol Physique Oil can be utilized to alleviate physique aches and joint and knee pains. It’s a nicely accepted reality {that a} physique therapeutic massage utilizing any physique oil like mustard oil, coconut oil or olive oil may give reduction to physique spasm and aches. However on the identical time, ache and aches arising out of arthritis, tendinitis, gout, spondilitis and so forth demand specified medical remedy with medicines. Thus, there’s a huge hole between the phrases ‘treatment’ and ‘care’ as far as the moment product is anxious.

The identical idea has been promulgated within the case of Commissioner of Customs, Central Excise and Service Tax, Hyderabad versus Ashwani Homeo Pharmacy (Civil enchantment No. 9525 of 2018 dated 03.05 .2023), the place the Hon’ble Supreme Courtroom has noticed:

… when the preparation is for treatment or prevention, it will be medicament however, if just for care, it will be beauty. In fact, cosmetics wouldn’t turn into medicament even when having subsidiary healing or prophylactic worth, as held by this Courtroom in Alpine Industries (supra).[emphasis added]

In view of the above discussions, it may be opined that the product Jac Olivol Physique Oil supposed to be manufactured and bought by the applicant shall not be lined underneath Heading 3004 of the First Schedule to the Customs Tariff Act as appealed for. As an alternative, it will get lined underneath Heading 3304 of the First Schedule to the Customs Tariff Act and could be taxed accordingly underneath the GST Act.

The WBAAR Ruling No. 19/WBAAR/2023-24 dated 10.08.2023 is confirmed and the Attraction stands rejected.

Because the members of the West Bengal Appellate Authority for Advance Ruling differ on the classification of the moment product i.e. ‘JAC OILVOL BODY OIL’, it’s deemed that no Advance Ruling might be issued in respect of the questions underneath enchantment as per the provisions of Part 101 sub-section (3) of the GST Act. Thus the Advance Ruling No. 19/WBAAR/2023-24 dated 10.08.2023 is deemed to be not in operation.

For Official Ruling Obtain PDF Given Beneath:

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