Kerala AAR: 12% GST Rate on ‘Dhathri Dahasamani’ Under Heading 2103 90 40

The product of Dhathri Ayurveda Private Limited called “Dhathri Dahasamani”, which is used as a flavour and taste component in drinking water, would get categorized as Mixed Condiments and Mixed Seasonings under the Heading 2103 90 40 of the First Schedule to the Customs Tariff Act, 1975, drawing a 12% GST, the Kerala Authority for Advance Ruling (AAR), Thiruvananthapuram held.

The petitioner, M/s. Dhathri Ayurveda Private Limited is the only distributor of the products which has been produced by M/s. Warriers Hospital and Panchakarma Centre, Velanchira, Kayamkulam, Alappuzha.

Sri. Soman N.L, representing the petitioner asks for the advance ruling so as to fetch the precise categorization and subjected GST rate for its product known as “Dhathri Dahasamani”.

AAR witnessed, that the product mainly comprises a blend of dried herbs and spices comprising of the ingredients like Chukku (Ginger), Karingali, Pathimukam, Ramacham, Naruneendi, and Chandanam which is being added in the boiling water primarily for its aromatic, flavouring or seasoning properties.

Under Chapter 9 Chukku is been counted, and the majority of the ingredients come beneath Heading 1211 of Chapter 12. Based on this analysis, the AAR figured that 92% of the ingredients fall under Heading 1211, making it primarily a mixture of condiments/seasonings.

Read also: Easy to Understand Mixed and Composite Supply Under GST

The product is unable to get consumed as a food item on its own and is primarily utilized for flavouring or improving the taste of water. Hence, it is correctly classified under Heading 2103 90 40 – Mixed condiments and mixed seasoning, the authority stated which comprising of Dr S.L. Sreeparvathy, IRS, Additional Commissioner Central Tax, and Shri Abraham Renn S, IRS Additional Commissioner State Tax.

The applicable tax rate for the product is 12% (6% CGST + 6% SGST) as per Entry at SI. No. 44 of Schedule II of Notification No. 01/2017 – Central Tax (Rate) dated 28.06.2017, according to the ruling.

This ruling placed an emphasis on classifying goods according to their fundamental characteristics, practical value, and intended use, and also clarified the correct categorization and tax treatment of other comparable ayurvedic and herbal items in the market.