Supply Of Ayurvedic Products Under AYUSH Department Licences Attracts 12% GST: AAR

The Telangana Authority of Advance Ruling (AAR) has ruled that 12% GST is payable on the supply of ayurvedic products under AYUSH department licences.

The two-member bench of B. Raghu Kiran and S.V. Kasi Visweswara Rao has observed that the products which are used for care are treated as "cosmetics" and therefore taxed at 18% GST. 12% GST is payable on the products which are used for cure and are treated as 'Medicaments' falling under Serial No. 63 of Schedule II.

The applicant, IncNut Lifestyle Retail Private Limited, is in the business of manufacturing hair oil, shampoos, etc., some of which are cosmetics and others Ayurvedic medicaments. They have obtained AYUSH licences for each of their products.

The applicant sought an advance ruling on the issue of whether the products manufactured by him under the licences issued by the AYUSH department of the Government of Telangana and sold as Ayurvedic products fall under HSN No. 30.04 or under HSN 3304 of the GST Tariff.

The applicant submitted that the product sold by them is a certificate issued by the Ayush Department, Government of Telangana. Therefore, it is an Ayurvedic product and is eligible for a concessional rate of tax of 12% under HSN 30049011 enumerated at Sl.No.63 of Schedule-II of Notification 1 of 2017.

The AAR noted that the products referred to by the applicant are classified as medicaments or cosmetics based on the parameters, namely whether the product has a drug license; whether the product's composition has medical ingredients; and the function or purpose indicated in the label and literature of the product.

Applicant's Name: M/s. Incnut Lifestyle Retail Private Limited

Date: 15.07.2022

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