Intro:
GST on Hajmola has stirred debate again. Is it a confectionery or a digestive ayurvedic medicine? Let’s break it down for Indian taxpayers and businesses.
What Triggered the Hajmola GST Dispute?
Dabur India Ltd., the maker of Hajmola, classified it under Ayurvedic digestive tablets (HSN 3004), attracting 12% GST.
However, the Revenue Department argued that Hajmola is consumed like a candy and should be taxed under confectionery items (HSN 2106), attracting 18% GST.
This classification battle reached the West Bengal Appellate Authority for Advance Ruling (AAAR).
Key Ruling on Hajmola’s GST Rate
In a decision that may impact the entire FMCG sector, the AAAR ruled in June 2024:
- Hajmola is not solely medicinal in nature
- It is marketed and consumed more like a candy
- The primary function is not curative or preventive as required under HSN 3004
Final Classification:
➡️ HSN 2106 (Edible preparations not elsewhere specified)
➡️ GST Rate: 18%
🔗 Read Official AAAR Order – wbcomtax.gov.in
Comparison Table: Hajmola Tax Positions
| Basis | Dabur’s Claim | AAAR Ruling (Final) |
|---|---|---|
| Classification | Ayurvedic medicine | Edible preparation (candy) |
| HSN Code | 3004 | 2106 |
| GST Rate | 12% | 18% |
| Usage Test | Curative/digestive | Confectionery-like use |
| Marketing/Packaging | Medicinal tones | Candy-style, attractive |
What This Means for Businesses
If You’re in FMCG or Ayurveda:
- Product function alone won’t determine GST rate
- Packaging, marketing, and customer perception matter
- Classification disputes can lead to tax demand + penalties
For Tax Consultants:
- Review clients’ product HSN codes and GST rates
- Check consistency between label claims, marketing language, and shelf placement
CBIC View on Medicinal Goods vs Food Products
As per CBIC Circular No. 82/01/2019-GST, to classify a product under medicaments (HSN 3004), it must:
- Be meant for specific disease/disorder
- Be prescribed or recommended
- Have curative or preventive effect
Hajmola, despite having ayurvedic ingredients, fails this three-fold test.
Expert Tip: Classify Based on Consumer Use, Not Manufacturer Intent
“Even if the product contains medicinal herbs, it will attract higher GST if sold and consumed like a snack,”
says CA Abhinav Mehta, GST Expert, Mumbai.
His advice?
“Match your HSN code with how your customer sees and uses the product.”
Conclusion: Hajmola GST Classification Isn’t About Herbs — It’s About How You Sell It
This ruling is a wake-up call for companies blending health and food. The line between medicine and snack is thin — and costly if misunderstood.
👉 Need help classifying your product correctly under GST?
Talk to our GST experts at Efiletax for quick, affordable guidance.
Summary
The AAAR ruled based on usage, marketing, and consumer perception. This affects FMCG classification under GST.
FAQ: GST on Hajmola
Q1. Is Hajmola taxed at 12% or 18% GST?
A: 18% GST under HSN 2106 as per the latest AAAR ruling.
Q2. Does having ayurvedic ingredients qualify a product as medicine?
A: Not always. The use, marketing, and consumer perception also matter.
Q3. Will this impact other ayurvedic brands?
A: Yes. FMCG and ayurvedic brands must carefully assess product classification to avoid litigation.