GST on Mehendi/ Heena Powder to be taxed at the rate 18%- AAR Rajasthan

Question before Authority:

Whether Heena is classifiable under Chapter 14 or 33?

Brief Facts:

• The applicant is engaged in manufacture of hair dye powder and intends to manufacture mehandi/ heena powder in future. He seeks clarification on the classification and rate of GST applicable on the mehandi/ heena powder.
• The applicant submits that HSN code no. 14041019 specifically mentions “Heena Powder” and so the applicant has mentioned the classification of their product heena powder under chapter 14 and accordingly rate of GST applicable is 5%.
• The applicant submits that the GST rate applicable on heena powder was 5% since inception and this fact is confirmed by the Agenda Item No. 10 of the issues recommended by the Fitment Committee for consideration of GST Council.
• The extracts from the Agenda Item are produced as follows:

Therefore, in light of the above cited extracts, which are relevant in the present case, the classification should be confirmed under HSN code 1404 with GST rate of 5%.

Observations of Authority:

• The applicant has stated that Heena powder was found in HSN code 14041019, so he accordingly classified his goods under Chapter 14 with 5% GST rate. The applicant is contesting that when system itself is specifying the HSN code for heena powder as 14041019, there is no doubt that the said product will not be covered under Chapter-14. Though many in industry are classifying the same goods in Chapter 33. Due to this confusion amongst the trade, he has applied for seeking advance ruling.
• It is well known fact that Heena/ Mehendi powder has a natural property of dye/ tanning and is generally used as hair dye. Therefore, we observe that the product is 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^th November, 2017 of the principal notification no. 01/2017- Central Tax (Rate) dated 28.06.2017 and attracts 18% GST.

Ruling:

Mehendi/ Heena Powder is covered under Chapter 33 and will attract GST @ 18%. 

Note: The CBIC has issued a clarification vide Circular No. 163/19/2021-GST clarifying on the issue of applicable GST rates on heena powder/ mehndi cones. Please read the following article for better understanding: GST rates on Heena Powder & Mehndi Cones