The West Bengal AAR ruled that jac olivol body oil is a cosmetic product and not medicament and 28% GST is applicable thereon.
The applicant intends to produce JAC OLIVOL BODY OIL classified as Ayurvedic patent & proprietary Medicine and inter alia the applicant is in advanced stages of entering into contract manufacturing agreement with the trade name owners of the said product.
The applicant submits that JAC OLIVOL BODY OIL is in the market for more than two decades, being granted with a licence under section 3(4) of the Drug and Cosmetic Act, 1940, inter alia, an ayurvedic patent and proprietary medicine.
The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there seeking an advance ruling as to whether the product manufactured & sold by the applicant shall fall under HSN No. 3004 or under HSN 3304 of the GST Tariff.
ISSUE RAISED
Whether the product ‘Jac Olivol Body Oil’ intended to be manufactured and sold by the applicant shall fall under HSN 3004 or under HSN 3304 of the GST Tariff?
RULING
The AAR held that the primary use of the product is ̳to take care of the skin, and not to cure the skin’.
The AAR relied on the ruling of Supreme Court in the case of Puma Ayurvedic Herbal (P) Ltd. in which it was held that if a product falls in the category of medicament it will not be an item of common use. A user will use it only for treating a particular ailment and will stop its use after the ailment is cured. The approach of the consumer towards the product is very material.
“The product JAC OLIVOL BODY OIL intended to be manufactured & sold by the applicant would be covered under Heading 3304 of THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT and would be taxed accordingly under the GST Act,” the AAR said.
CASE TITLE: INDRANIL CHATTERJEE