Mehendi /Henna powder falls under Chapter 33; Attracts 18% GST

May 11, 2020

Facts

  • Sunil Kumar & Co. is engaged in the manufacture of hair dye powder in Sojat city
  • While filing application for registration under GST Laws, the list of goods mentions Chapter 14 for henna powder.
  • The HSN code no. 14041019 specifically mentions “Henna Powder” and so the applicant has mentioned the classification of their product henna powder under chapter 14 and accordingly, the rate of GST applicable is 5%
  • The applicant submits that when the GST portal itself specifies the HSN code for henna powder as 14041019, there is no doubt that the said product is covered under chapter 33
  • Amendment made vide insertion of serial no. 78A by Noficaon No. 06/2018-Central Tax (Rate) dated 25.01.2018 is specific for Mehandi paste in cones and cannot be considered with reference to Mehandi powder.

Issue before the AAR

  • Whether henna is classifiable under chapter 14 or 33?

Discussion and Finding of AAR

  • AAR observe that Henna and Mehendi are same product with different names and is obtained from Mehendi tree. Dried leaves of Henna/Mehendi are collected and further grinded to obtain Mehndi/Henna powder.
  • Tariff items 14041011 to 14041090 has already been omitted from the customs tariff Act, 1975 vide the Finance Act,2006.
  • Amendments in the Customs Tariff Act, 1975 the question with regard to classifying the product Henna/Mehendi powder under tariff item 14041011 does not arises in as much as the fact that the tariff item has been omitted.
  • Since Henna/Mehendi powder has a natural property of dye/tanning and is generally used as hair dye.
  • Therefore, we observe that the product is rightly classifiable under chapter heading 3305 as preparations for use on the hair and covered under amended Noficaon No. 41/2017-Central Tax (Rate) dated 14 November 2017 of the principal nonfiction no. 01/2017-Central Tax (Rate) dated 28.06.2017 and attracts GST @18% (CGST 9% + SGST 9%).

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