The Telangana High Court has resolved a long-standing dispute spanning two decades. The judicial body has determined that certain products from Himalaya and Emami, including Navratna oil, Gold turmeric cream, Boroplus antiseptic cream, Boroplus prickly heat powder, and Sona Chandi Chyawanprash, shall be categorised as medicinal preparations rather than cosmetics.
This ruling proves advantageous for the companies involved, as it reduces the applicable Goods and Services Tax (GST) to 10 percent. Had these products remained classified as cosmetics, they would have been subject to a 20 percent GST rate.
Since the fiscal year 1996-97, these items had been treated as cosmetics, with commercial taxes levied at 20 percent. A division bench comprising Justice P. Sam Koshy and Justice N. Tukaram has now put this matter to rest.
The sister companies, Himalaya Limited and Emami Limited, have been embroiled in a legal battle with the Andhra Pradesh Sales Tax Department since 1997, contesting the classification of these products as cosmetics. After challenging the issue before the Sales Tax Appellate Tribunal (STAT), the companies have finally received a favourable verdict after two decades. The court has declared the majority of their products as medicinal, with only two items remaining in the cosmetics category.
The sales tax department failed to substantiate its claim that these products were cosmetics rather than medicines, largely due to the Ayurvedic formulations employed in their manufacture.
-Sanyogita
