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2020 (6) TMI 488 - AAR - GSTClassification of goods - Henna (Mehndi Cone) - Whether henna is classifiable under chapter 14 or 33? - HELD THAT - It is well known fact that Henna/ Mehendi powder has a natural property of dye/ tanning and is generally used as hair dye. Therefore, the product is rightly classifiable under chapter heading 3305 as preparations for use on the hair and covered under amended Notification No. 41/2017 -Central Tax (Rate) dated 14 November, 2017 of the principal Notification No. 1/2017 -CT(Rate) dated 28.6.2017 and attracts GST @18%.
Issues: Classification of goods under GST - Henna/Mehendi powder.
Analysis: 1. Submission and Interpretation of the Applicant: The applicant, engaged in manufacturing hair dye powder, seeks clarification on the classification and GST rate for future production of mehandi/henna powder. The applicant relied on the HSN code 14041019 for henna powder during GST registration, indicating classification under Chapter 14 with a 5% GST rate. The applicant referenced amendments and fitment committee recommendations to support the classification under HSN code 1404 with a 5% GST rate. 2. Questions on Which the Advance Ruling is Sought: The primary question is whether henna should be classified under Chapter 14 or 33 for GST purposes. 3. Personal Hearing: The applicant was granted a personal hearing where the authorized representative reiterated the application's submissions, emphasizing early disposal. 4. Comments of the Jurisdictional Officer: The jurisdictional officer classified artificial henna and henna products under Chapter 33, attracting an 18% GST rate as cosmetic items. 5. Findings Analysis & Conclusion: The ruling authority considered the nature of henna/mehendi as a dye derived from the Lawsonia inermis plant. Analyzing the Customs Tariff Act, 1975 amendments, the authority noted the omission of relevant tariff items, leading to the classification of henna/mehendi powder under Chapter 33. Referring to Notification No. 41/2017, the authority concluded that henna/mehendi powder falls under preparations for hair use, attracting an 18% GST rate (CGST 9% + SGST 9%). 6. Ruling: The ruling confirmed that mehendi/henna powder falls under Chapter 33 and is subject to an 18% GST rate (CGST 9% + SGST 9%).
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