The body that merely maintained because ayurvedic products such as hair oil, conditioners, face serums, etc. are manufactured under licences issued by AYUSH, these cannot be classified as medicaments, which are subject to a lower GST of 12 per cent. Cosmetics, on the other hand, attract 18 per cent GST, according to a ToI report.
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While announcing its decision in the case of IncNut Lifestyle Retail, the Telangana AAR examined several decisions, including that of the Supreme Court in the context of excise laws. The tenet set by the top court decisions was that if a product’s primary function is ‘care ‘ and not ‘cure’, it is not a medicament.
While cosmetics are used to improve a person’s appearance or beauty, medicinal products are used to treat some medical condition. A product that is used mainly in curing or treating ailments or diseases and contains curative ingredients — even in small quantities — is to be branded as a medicament.
IncNut Lifestyle Retail’s Jeevath Root Stimulating Hair Oil, Vartha Hydrating No-Frizz Hair Conditioner, and various face serums were classified as cosmetics. On the other hand, other products like Shastra Oil Pulling Oral Care Oil, which besides strengthening teeth and gums also reduced tooth sensitivity and removed dental plaque, and an anti-dandruff serum that cured the medical condition of sedorrhoeic dermatitis, were treated as medicants.
