Order Date: 15 July 2022

Key Pointers:

• The Applicant, Incnut Lifestyle Retail Private Limited is in the business of manufacturing hair oil, shampoos etc., some of which are cosmetics and others are Ayurvedic medicaments. They have obtained AYUSH licenses for each of their products.
• They are desirous of ascertaining whether the products manufactured by them (52 in number) are cosmetics or medicaments. Hence this present application.
• The issue involved in this case is whether the products manufactured by him under the licenses issued by AYUSH department of Government of Telangana and sold as Ayurvedic products fall under HSN No. 30.04 or under HSN 3304 of the GST Tariff?
• The Authorities observed that the products referred by the applicant are classified as medicament or cosmetic based on the following parameters:

a) Whether the product has a drug license; and

b) Whether the Composition of the product has medical ingredients; and

c) The function or purpose indicated in the label and literature of the product.

• The Authorities held that by applying the parameters, the products which are used for care are treated as ‘Cosmetics’ and therefore taxed @9% CGST & SGST each; the products which are used for cure are treated as ‘Medicaments’ falling under Serial No. 63 of Schedule II taxable @6% CGST & SGST each.