Himani Navaratan Oil, Himani Gold Turmeric Ayurvedic Cream Are Ayurvedic Medicine ; Telangana High Court

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 bench of Justice P.Sam Koshy and Justice N.Tukaramji has observed that the rapper in whom the cream is sold very emphatically highlights it as an ayurvedic medicine. The rapper also clearly indicates that the cream is highly effective for cracked skin, pimples, boils, and numerous other skin blemishes. Nowhere did the rapper claim it to be a cosmetic product or a product that could enhance the complexion or fairness. 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.

The petitioner has filed the eleven tax revision cases, assailing 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 issue raised 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 providing an effective memory aid, toning up body muscles, removing tiredness, being useful in minor burns and cuts, and also preventing premature hair fall. None of the actions mentioned in the label of the product cater to the definition of a cosmetic product or a toiletry product.

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 is 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 court, while allowing the tax revision, 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 do not seem to be proper, legal, and justified.

Counsel For Petitioner: Lakshmi Kumaran

Counsel For Respondent: Swaroop Oorilla

Case Title: The State of Andhra Pradesh and Others Versus M/s.Himani Limited and Others.

Case No.: Tax Revision Case Nos.155, 156, 166, 169, 182, 183, 187, 188, 192, 193 And 211 Of 2004

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