The Gujarat Appellate Authority of Advance Ruling (AAAR) has ruled that Aorom Herbal Smokes is not Medicinal Cigarettes and attracts 28% GST.
The bench of Rajeev Topno and B V Siva Naga Kumari has reject the appeal filed by the appellant and upheld the ruling of the Authority of Advance Ruling (AAR) by which it was held that 28% GST on supply along with Compensation Cess of ₹ 4006 per thousand.
The bench noted that appellant does not hold any license for manufacture of Ayurvedic medicine from any regulatory body, permitting them to manufacture the goods i.e. Aorom Herbal Smokes, which as per their claim is a medicine.
M/s. Aorom Herbotech, the appellant submits that it supplies ‘Aorom Herbal Smokes (regular)’. The applicant submits that its goods are a new initiative for better health and that HSN of the subject goods is 30049011.
The appellant submitted that herbal smoking is an ancient practice to cure many diseases from root mentioned in Ayurveda; this practice is named as dhumapana; it is still a common practice in ayurvedic treatments / therapy such as Panch-Karma and is done by ayurvedic M. Ds as a medicine to many diseases.
The appellant sought the advance ruling on the issue of determination of the liability to pay Tax on Sales of Aorom Herbal Smokes – (regular flavour).
The AAR held that 28% IGST on inter state supply along with Compensation Cess of ₹ 4006 per thousand. 14% CGST + 14% SGST on intra state supply along with Compensation Cess of ₹ 4006 per thousand.
The appellant appealed against the order passed by the AAR on the grounds that the product involves inhaling herbal smoke; it helps cure cough, cold, bronchitis, asthma, it also helps increase kapha and vata for treating or preventing the diseases. Dhumapana literally means smoking medicinal drugs. Dhumapana in ayurveda is recognized as an approved method by the Ministry of Ayush as well as National Institute of Ayurveda.
The AAAR rejects the appeal and upholds the advance ruling.
Appellant Name: M/s. Aorom Herbotech
Date: 30/12/2024
