WB AAR: 28% GST Levy on Olivol Body Oil Under HSN Code 3304

Olivol Body Oil takes care of the skin but does not cure it, West Bengal Authority of Advance Ruling (AAR) under GST held. Under tariff heading 3304 Olivol Body Oil is covered. The bench of Tanisha Dutta and Joyjit Banik witnessed that Olivol body oil is known as a preparation for the care of skin, thereby being deemed a cosmetic product utilized to get soft and smoother skin and not a medicament used for the treatment or prevention of any disease or ailment.

The petitioner has the purpose of producing Jac Olivol Body Oil, categorized as an Ayurvedic patent and proprietary medicine among others is in the advanced phases of inserting into the contract that produces the agreement with the trade name owners of the stated product.

According to the applicant, Jac Olivol Body Oil has been available on the market for more than 20 years after being given a license under Section 3(4) of the Drug and Cosmetic Act of 1940, which included, among other things, an ayurveda patent and proprietary medication. In order to determine whether the product that the applicant manufactures and sells falls within HSN No. 3004 or HSN No. 3304 of the GST Tariff, the applicant requested an advance ruling.

The petitioner questioned that the product is a medicament and must counted under Customs Tariff Head 3004, levying a 12% GST. When the product is been made via the use of ingredients regulated under the Drugs and Cosmetics Act and as per the formula specified in the Pharmacopoeia, it cannot be categorized as a medicament under Heading 3004 unless it is meant for therapeutic or prophylactic uses, AAR noted.

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The product’s major operation is “care” and not cure,” despite the same being subsidiary curative or prophylactic properties. The product JAC OLIVOL BODY OIL purposed to be manufactured and sold through 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.