Himani Navaratan Oil and Gold Turmeric Ayurvedic Cream Are Ayurvedic Medicines: Telangana HC allows Sales Tax Revision Petition [Read Order]
The court held that the findings given by STAT holding it to be a product to be brought within the purview of Entry 36 of the 1st Schedule of the Act is not valid.
Telangana High Court – Himani Navaratan Oil – Gold Turmeric Ayurvedic Cream – Ayurvedic Medicines – Gold Turmeric Ayurvedic Cream Are Ayurvedic Medicines – Taxscan
Telangana High Court – Himani Navaratan Oil – Gold Turmeric Ayurvedic Cream – Ayurvedic Medicines – Gold Turmeric Ayurvedic Cream Are Ayurvedic Medicines – Taxscan
In the case of M/s.Himani Limited and Others, the Telangana High Court has held that the 10% duty is leviable on Himani Navaratan Oil and Himani Gold Turmeric Ayurvedic Cream as they are classified as ayurvedic medicine and not cosmetics.
The petitioner challenged the common order passed by the Sales Tax Appellate Tribunal, Hyderabad (STAT). The whole dispute revolves around six products being manufactured and marketed by the two sister concerns. The products are Navaratan Oil, Gold Turmeric Ayurvedic Cream, Nirog Dant Power Lal, Boroplus Antiseptic Cream, Boroplus Prickly Heat Powder, and Sonachandi Chavanprash.
The STAT has held Navaratan Oil, Gold Turmeric Ayurvedic Cream, and Nirog Dant Power Lal to be products that are either cosmetics or toiletry products, which is challenged by the petitioner.
The question was whether the products would fall under Entry 36 or Entry 37 of the CGST Act and TGST Act. If the products fall under the classification of cosmetics, then they become leviable for GST at a rate of 20%. On the other hand, if the products are to be treated as drugs within Entry 37, then these products would be leviable of duty at the rate of only 10%.
The petitioner/assessee contended that, in so far as Himani Navaratan Oil is concerned, the product is a medicinal product and is prescribed for keeping the head cool, relieving headaches, providing sound sleep, providing an effective memory aid, toning up body muscles, removing tiredness, being useful in minor burns and cuts, and also preventing premature hair fall.
The assessee argued that even the license for the product was obtained as an ayurvedic product sanctioned by the Drug Controller after thorough scrutiny of its composition with its intended cure of headache, reduction in burns, improving blood circulation, and also for improving hair growth. It was an ayurvedic product and is not a perfumed hair oil with medicinal value. All the ingredients and compositions that are used for the manufacturing of the product are found in Ayurvedic texts.
The division bench of Justice P. Sam Koshy and Justice N.Tukaramji has observed that the rapper clearly indicates that the cream is highly effective for cracked skins, pimples, boils and numerous other skin blemishes. The petitioner/assessee has by now made available all the requisite documentary proofs with the Department for declaring the product as a drug, particularly, in the light of the Revenue having utterly failed to classify it as a cosmetic.
Further the licensing authority having granted a license for the product as an ayurvedic drug, the manufacture, sale, and distribution of the product as a drug and not a cosmetic are established, and it is being marketed only as a drug and not as a cosmetic.
While allowing the tax revision, the court held that the findings given by STAT holding it to be a product to be brought within the purview of Entry 36 of the 1st Schedule of the Act is not valid.
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