Facts: The applicant is engaged in manufacturing and supply to its various customers in the State of Uttarakhand and outside of the state, details of which are as.
- Wet Baby Wipes
- Wet Face Wipes.
- Bed and Bath Towels.
- Shampoo Towels.
The wipes are used for the purpose of cleaning/wiping the body by absorbing dirt, dust, grime, oil, etc. The applicant has requested to classify the following goods under the GST Regime quoting the reason of overlapping entries in the GST Schedule as notified by the Notification No. 1/2017-Central Tax(Rate) dated 28.06.2017 and Notification No. 1/2017- State Tax (Rate); dated 30.06.2017 as amended vide Notification No.41/2017-Central Tax(Rate) dated 14.11.2017 and the Notification No. 41/2017-State Tax(Rate) dated 14.11.2017 (“herein after collectively referred to as the ‘Rate Notifications”).
Issues Involved: Advance ruling was sought by an applicant on HSN classification under the GST Schedule as well as the GST rates applicable.
Held: The Hon’ble AAR of Uttarakhand vide RULING NO. 05/2018-19 dated July 20, 2018 held that the basic nature of products ‘wet baby wipes’, ‘wet face wipes’ and ‘bed and bath towels’ being to gently clean skin by removing dirt and moistening it and on comparing basic functions of ingredients it is found that products are impregnated in form of lotion over non-woven fabric, same will fall under HSN Code 3307 and will attract GST at rate of 18 per cent vide Notification No. 41/2017-Central Tax (Rate).
However, product ‘shampoo towels’ is meant for application on hair and said product is indeed manufactured for use on hair only. Thus, this product merits classification under chapter 3305 of GST Tariff Act, 2017 which covers – “preparations for use on the hair”. Coconut oil is not a ‘reparation for use on the hair. It is fixed vegetable oil capable of being used as cooking medium (or for other purposes including for application on the hair), in the absence of a proof that it is specially prepared for use on the hair or any label/literature/indications on the containers to that effect, the subject goods cannot be classified under heading 3305 simply because they were packed in small containers and applied by some sections of the society on the hair. It was further find that in the package they made declaration as “Cleans and shampoos hair in minutes. No water required. No rinsing required. Easy & convenient for bedridden patients or people requiring partial assistance. Easy to use & dispose”, Accordingly hold that the product “Shampoo Towel,” merit classification under Chapter 3305 of GST Tariff Act, 2017 and the rate of GST applicable on said product is 18 per cent.