In Advance Ruling No. KER/14 -AAR- AAR (Kerala) classifies 'Dhathri Dahasamini' as a mixture of condiments and seasonings, liable to GST at 12%
Members Dr. S.L. Sreeparvathy & Abraham Renn S. [04-04-2023]

Read Order: In Re: M/s. Dhathri Ayurveda Private Limited

Chahat Varma

New Delhi, July 21, 2023: The Kerala Authority for Advance Rulings has classified the product ‘Dhathri Dahasamini’ as a mixture of condiments and seasonings. The Authority ruled that the product should be classified under Heading 2103 90 40 - Mixed condiments and mixed seasoning of the Customs Tariff Act, 1975. As a result, the product was liable to GST at a rate of 12%. This classification was based on the understanding that the primary use of the product was for its aromatic, flavouring, or seasoning properties when added to boiling water.

M/s. Dhathri Ayurveda Private Limited, the applicant, who was the sole distributor of herbal ayurvedic products produced by M/s. Warriers Hospital and Panchakarma Centre, requested an advance ruling on the correct classification of the product ‘Dhathri Dahasamani’. They contended that the product should be classified under HSN 0910 91 00 instead of HSN 2106 90 50.

The two-member bench of Dr. S.L. Sreeparvathy and Abraham Renn S.  noted that the product was predominantly made of ingredients that fell under Heading 1211 of the Customs Tariff Act. Heading 1211 covered plants and parts of plants used primarily in perfumery, pharmacy, or for insecticidal, fungicidal, or similar purposes, in fresh or chilled form. The applicant provided a list of ingredients, and it was found that only one ingredient, Chukku (Ginger: 0910 11 20 - Dried, unbleached), fell under Chapter 9 of the Customs Tariff Act, while all the other ingredients fell under Heading 1211 of Chapter 12.

The bench further noted that the product was not intended to be used as a food preparation for direct or indirect human consumption, even after processing such as cooking or dissolving in water, milk, or other liquids. Instead, the product was primarily used for flavouring or enhancing the taste of water, specifically by adding it to boiling water. Consumers used the product to add flavour, aroma, or taste to boiled water and not for consuming the product itself by adding boiled water. Therefore, based on the common understanding and usage, the product was considered to be used for flavouring boiled water rather than for direct human consumption.