Memo.No.10247/CT.II (1)/2009-1, REVENUE (CT.II) DEPARTMENT Dated: 29th April, 2009.
Sub:- APVAT Act 2005 –CHMR Division – Manufacturers of Ayurvedic Products Entry 88 & 117 in Schedule – IV of the Act amended w.e.f. 1-7-2008 – Certain ambiguity noticed – Clarification – Issued.
Ref: - 1. From the Chairman, FAPCCI, Ref.T&C/Rep/226/2009, dt.27.2.2009.
2. From the CCT, Ref.No.AIII (3)/47/09, dt.2.03.2009.
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As per the Entry 88 of the Schedule-IV of APVAT Act, 2005 the drugs and medicines are liable to tax @4%. This entry specifically excluded medicated goods and products capable of being used as cosmetic and toilet preparations, including tooth pastes, tooth powders, Cosmetic, Toilet Articles and soaps. Later the Government vide Notification in G.O.Ms.No.1625, Revenue (CT.II) Department, dt.6.11.2006 added new entry 117 to the Schedule-IV of APVAT Act, 2005 by bringing Ayurvedic products and Homeopathic Products liable to tax @4% subject to condition that AYUSH (GOI) should certify such products as 100% Ayurvedic or Homeopathic Products, irrespective of their use. The Entry 117 was again substituted as follows in the Notification issued vide G.O.Ms.No.818, Revenue (CT.II) Department, dt.30.6.2008.
"117 Ayurvedic and Homeopathic products manufactured under license issued by the Licensing authorities concerned under Drugs and Cosmetics Act, 1940."
2. In view of the above amendment, the condition of producing certificate by AYUSH THAT THE PRODUCTS ARE 100% Ayurvedic or Homeopathic has been dispensed with and new condition of possessing the license issued by the concerned authority under Drugs and Cosmetics Act, 1940 has been prescribed.
3. The Commissioner of Commercial Taxes in the letter 2nd cited, has stated that in view of the aforesaid changes there is no unanimity among the Assessing Authorities on the rates of taxes, applicable to different commodities of Ayurvedic and Homeopathic Medicines/ Products and that the related issues are pending before different appellate forums and requested the Government for clarification on rates of taxes, applicable to different commodities under Entry 117 and Entry 88 of Schedule – IV of the APVAT Act, 2005 with specific reference to the following 8 (eight) commodities.
1. Boroplus Antiseptic Cream (Ayurvedic medicine)
2. Boroplus Prickly Heat Powder (Ayurvedic medicine)
3. Sonachandi Chavanprash (Ayurvedic medicine)
4. Menthoplus Pain Balm (Ayurvedic medicine)
5. Fast Relief (Ayurvedic medicine)
6. Sona Chandi Healthy & Fair Ayurvedic Baby Message Oil (Ayurvedic product)
7. Boroplus Lotion (Ayurvedic medicine)
8. Navaratan Oil (Ayurvedic product)
4. The Government after careful examination of the matter with reference to the provisions of the APVAT Act, 2005 and various judicial precedents connected with the relevant entries and in exercise of powers vested under Section 76 of the APVAT Act, 2005 hereby clarify that:
(1) the following six commodities come under the category of the Ayurvedic medicine and therefore are taxable @4% under Entry 88 of the Schedule-IV of the APVAT Act, 2005 from 1.4.2005 onwards.
I. Boroplus Antiseptic Cream (Ayurvedic medicine)
Ii. Boroplus Prickly Heat Powder (Ayurvedic medicine)
Iii. Sonachandi Chavanprash (Ayurvedic medicine)
Iv. Menthoplus Pain Balm (Ayurvedic medicine)
V. Fast Relief (Ayurvedic medicine)
Vi. Boroplus Lotion (Ayurvedic medicine)
(2) the following two commodities come under the category of Ayurvedic Products taxable @4% under entry 117 of the Schedule – IV of the APVAT Act, 2005 from the date of incorporation of Entry 117 in Schedule-IV of the Act i.e., from 1.09.2006 and therefore they are liable for tax @12.5% from 1.4.2005 to 31.08.2006 under Schedule –V of the APVAT Act, 2005.
(i) Sona Chandi Healthy & Fair Ayurvedic Baby Massage Oil (Ayurvedic Product)
(ii) Navaratan Oil (Ayurvedic Product)
(3) the Ayurvedic Products taxable under entry 117 of the Schedule –IV of the APVAT Act, 2005 shall be liable for VAT @4% from 1.9.2006 without the requirement of the certificate of AYUSH to the effect that the products are 100% Ayurvedic or Homeopathic, in pursuance of the amendment made to the Entry 117 by Notification in G.O.Ms. No.818, Revenue (CT.II) Dept., dt.30.06.2008.
5. The Commissioner of Commercial Taxes is therefore requested to take necessary action accordingly.
G.SUDHIR
PRINCIPAL SECRETARY TO GOVERNMENT