While upholding the ruling Appellate Authority Advance Ruling (AAR) the Allahabad High Court has held that odomos is not a medicine, it is a mosquito repellant hence 18% Goods and Services Tax (GST) applicable.
The petitioners pitched the product in their sale material and advertisements as a mosquito repellent. Various mosquito repelling qualities are identified as defining characteristics of the subject goods in the market.
The product is not normally prescribed as a medicine by medical practitioners as a drug. There is no restriction on odomos sales. The product is sold on-demand at the counters in shops and establishments. Sales are not restricted to chemists/druggists alone.
The product is a mosquito repellent by virtue of its mosquito repelling characteristics and is so understood in common parlance. The dealers identify and sell the product as a mosquito repellent. Customers purchase the same and use it in the like manner.
The division bench comprising of Justices Biswanath Somadder and Ajay Bhanot pronounced the judgment on the writ petition filed by M/S Dabur India Ltd.
The Court adopted twin test method evolved by the Hon’ble Supreme Court was applied to determine the classification of a product as a cosmetic or medicament in Puma Ayurvedic Herbal (P) Ltd. v. Commissioner, Central Excise, Nagpur.
The Court also said that the common parlance test or the market identity test for classification of the product was satisfied.
The division bench also observed that the active ingredient of the product is NNDB which is the improved version – formula of DEET. The essential quality of DEET is mosquito repelling. The NNDB was introduced to overcome the itchiness caused by the DEET. The basic component of the product is DEET while the quality enhancements are created by the NNDB.
While dismissing the writ petition, Court also added that there is no palpable infirmity in the classification of the product in the order passed by the Appellate Authority.
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