Olivol Body Oil Takes Care Of The Skin, And Doesn’t Cure Skin, Attracts 28% GST: AAR
Mariya Paliwala
2 Sep 2023 6:30 AM GMT
The West Bengal Authority of Advance Ruling (AAR) has ruled that Olivol Body Oil takes care of the skin but does not cure it. Olivol Body Oil is covered under tariff heading 3304.The bench of Tanisha Dutta and Joyjit Banik has observed that olivol body oil is commonly understood as preparations for the care of skin, thereby being considered a cosmetic product used to get soft and smoother...
The West Bengal Authority of Advance Ruling (AAR) has ruled that Olivol Body Oil takes care of the skin but does not cure it. Olivol Body Oil is covered under tariff heading 3304.
The bench of Tanisha Dutta and Joyjit Banik has observed that olivol body oil is commonly understood as preparations for the care of skin, thereby being considered a cosmetic product used to get soft and smoother skin and not a medicament used for the treatment or prevention of any disease or ailment.
The applicant intends to produce Jac Olivol Body Oil, classified as an Ayurvedic patent and proprietary medicine, and, inter alia, is in the advanced stages of entering into a contract manufacturing agreement with the trade name owners of the said product.
The applicant contended that Jac Olivol Body Oil has been on the market for more than two decades after being granted a licence under Section 3(4) of the Drug and Cosmetic Act, 1940, including, inter alia, an ayurvedic patent and proprietary medicine.
The applicant sought an advance ruling as to whether the product manufactured and sold by the applicant shall fall under HSN No. 3004 or under HSN No. 3304 of the GST Tariff.
The applicant contended that the product is a medicament and deserves to be classified under Customs Tariff Head 3004, attracting 12% GST.
The AAR noted that even if a product is manufactured using ingredients regulated under the Drugs and Cosmetics Act and according to the formula prescribed in the Pharmacopoeia, it cannot be classified as a medicament under Heading 3004 unless it is meant for therapeutic or prophylactic uses. The product's primary function is "care" and not cure," even if it has subsidiary curative or prophylactic properties.
"The product JAC OLIVOL BODY OIL intended to be manufactured and 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.
Applicant’s Name: Indranil Chatterjee
Date: 10/08/2023
