Rose Water for Religious Use Not Exempt from GST: Tamil Nadu AAAR

In re T.S.R. & Co. (GST AAAR Tamil Nadu)

Summary: The Tamil Nadu State Appellate Authority for Advance Ruling (AAAR), comprising Shri S.K. Vimalanathan, Member (CGST), and Shri S. Nagarajan, Member (SGST), upheld the ruling against T.S.R. & Co., holding that its product “Pooja Panneer” (rose water) was correctly classifiable under HSN 3301 90 79 and was not eligible for exemption as puja samagri under Entry No. 167 of Notification No. 10/2025-Central Tax (Rate) dated 17 September 2025. The appellant had challenged Advance Ruling No. 46/ARA/2026 dated 5 May 2026, under which the Tamil Nadu AAR had classified the product under HSN 33019079 and rejected the claim for exemption. The appellant maintained that its product was manufactured and marketed exclusively for religious rituals and should receive the same tax treatment as other materials used in worship. The appeal was filed on 25 June 2026, and an earlier appellate order dated 31 July 2026 had condoned a delay of six days, enabling consideration of the appeal on merits.

The appellant explained that Pooja Panneer was manufactured by infusing deionised or reverse-osmosis potable water with natural rose distillate, hydrosol or rose essence, without added alcohol or cosmetic actives. The product was sold as “Alilai Krishnan Pooja Panneer” in transparent bottles labelled for religious purposes, external use and puja use, and not for cosmetic use. It was marketed through puja stores, temple counters and devotional e-commerce channels. During the personal hearing on 25 August 2026, the authorised representatives, Ms. Sharanya Vijay K. and Ms. Srividya S.U., submitted judicial precedents, relevant notifications, scriptural references and lists of major buyers. They argued that the product’s market identity, intended use, packaging and marketing demonstrated its character as puja samagri. The appellant further submitted that the word “namely” appearing in Entry 167 should be interpreted as illustrative rather than restrictive, so that the exemption would extend to other materials used in religious ceremonies, including rose water. It cited the treatment of Gangajal as supporting this interpretation.

The AAAR examined Entry 167 of Notification No. 10/2025-Central Tax (Rate), which exempts specified puja samagri of any tariff chapter. The entry identifies ten groups of articles, including rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya, sacred thread, wooden khadau, panchamrit, vibhuti, unbranded honey, wick for diya, roli, kalava and chandan tika. The Authority held that the words “puja samagri namely” introduce a closed and exhaustive list, rather than an open-ended category covering every material used for worship. The appellant relied on Ajanta Electricals v. CCE, Vee Nissan Electronics v. CCE and CST v. Bishram Tiwari to argue for a broader interpretation of “namely”. However, the AAAR distinguished decisions concerning tariff descriptions from the interpretation of exemption notifications and relied on the Constitution Bench judgment in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Co., (2018) 9 SCC 1. It also referred to State of Tamil Nadu v. Kasiraja Nadar, [1981] 47 STC 337 (Madras High Court), which treated “namely” as restrictive in the context of a notification.

The Authority additionally considered the discussions at the 14th and 15th meetings of the GST Council. Those discussions demonstrated that the Council had considered several materials used in religious ceremonies and deliberately distinguished exempt items from manufactured goods such as agarbatti, sambhrani and loban. According to the AAAR, the decisions reflected an intention to limit the exemption to specifically identified products rather than grant a general exemption to all articles used in worship. The appellant’s reliance on historical sales-tax or excise treatment was rejected because exemption under the GST regime had to be established independently under the applicable statutory notification. The Authority also rejected reliance on a social media clarification concerning Gangajal, observing, with reference to CCE v. Ratan Melting & Wire Industries, (2008) 13 SCC 1, that administrative clarifications could not override statutory provisions or extend an exemption beyond the terms of the notification.

On classification, the AAAR examined the General Rules for Interpretation of the Customs Tariff, the relevant Chapter Notes and the Harmonised System of Nomenclature. The appellant had relied on judicial decisions concerning common parlance and predominant use, including CCE v. Sharma Chemical Works and Indian Aluminium Cables Ltd. v. Union of India. The Authority held that common parlance and end-use considerations could not displace the specific statutory descriptions and Chapter Notes. It noted that Heading 3301 expressly covered aqueous distillates and aqueous solutions of essential oils, whereas Chapter Note 3 to Chapter 33 excluded such products from the scope of Heading 3303 relating to perfumes and toilet waters. The fact that the aromatic constituent was allegedly present in a minuscule proportion did not change the classification, since the tariff did not prescribe a minimum concentration for aqueous solutions of essential oils.

Accordingly, the AAAR concluded that Pooja Panneer was correctly classified under HSN 3301 90 79, covering the relevant aqueous solutions of essential oils, and did not qualify for exemption under Entry 167 of Notification No. 10/2025-Central Tax (Rate). It held that neither the religious purpose of the product nor its labelling and distribution through devotional channels could enlarge the exemption notification. The AAAR therefore upheld Advance Ruling No. 46/ARA/2026 dated 5 May 2026 and declined to interfere with it. The appellate decision reinforces the distinction between tariff classification based on statutory descriptions and eligibility for exemptions governed by the precise language of the relevant notification.

Related AAR Ruling: The Tamil Nadu AAR had earlier rejected the GST exemption claimed for Pooja Panneer (rose water). Read Rose Water Taxable at 18% GST Because It Was Not Recognised as Puja Samagri.

Cases Discussed

• Indian Aluminium Cables Ltd. v. Union of India, 1985 (21) E.L.T. 3 (Supreme Court). Relied upon by the AAAR for the principle that manufacturing process and end-use are not necessarily decisive where the statutory tariff description determines classification.
• CCE v. Ratan Melting & Wire Industries, (2008) 13 SCC 1 (Supreme Court). Relied upon to explain that departmental circulars and administrative clarifications cannot override statutory provisions or judicially declared law.
• O.K. Play (India) Ltd. v. CCE, (2005) 180 E.L.T. 300 (Supreme Court). Considered for the relevance of the Harmonised System of Nomenclature and its explanatory notes in tariff classification.
• Vee Nissan Electronics v. CCE, (2004) 164 E.L.T. 3 (Supreme Court). Relied upon by the appellant in support of its contention that the expression “namely” was not necessarily restrictive. The AAAR distinguished the decision because it concerned tariff entries rather than an exemption notification.
• CCE v. Sharma Chemical Works, (2003) 154 E.L.T. 328 (Supreme Court). Cited by the appellant concerning common parlance and the primary-use approach to classification. The Authority held that these considerations could not override the applicable statutory tariff framework.
• CCE v. Vipul Shipyard, (1996) 88 E.L.T. 640. Cited by the appellant in support of classification based on common parlance and primary use. The AAAR did not accept these considerations as sufficient to displace the statutory classification.
• Swastik Agency v. State of Tamil Nadu, (1993) 90 STC 45. Distinguished because the present goods were classified as an aqueous solution of essential oil and not as an essential oil itself.
• Nat Steel Equipment Pvt. Ltd. v. CCE, (1988) 69 STC 58. Cited by the appellant concerning common parlance and use-based classification. The AAAR maintained that statutory Chapter Notes controlled the classification.
• Ajanta Electricals v. CCE, (1988) 35 E.L.T. 34 (Punjab and Haryana High Court). Relied upon by the appellant to contend that “namely” can have an illustrative meaning depending on context.
• State of Tamil Nadu v. Kasiraja Nadar, [1981] 47 STC 337 (Madras High Court). Followed in substance by the AAAR for the restrictive interpretation of the expression “namely” in the relevant notification context.
• CST v. Bishram Tiwari, 1971 SCC OnLine All 31 (Allahabad High Court). Relied upon by the appellant for a contextual interpretation of “namely”; the AAAR preferred the contrary reasoning in Kasiraja Nadar.
• Bishambar Dayal v. Commissioner of Sales Tax, (1963) 14 STC 184. Cited by the appellant in support of common parlance and primary-use tests.
• Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Co., (2018) 9 SCC 1 (Supreme Court). Relied upon by the Authority to require strict interpretation of exemption notifications and to place the burden of proving eligibility on the claimant.
• Dabur India Ltd. v. CCE, (2015) 324 E.L.T. 572 (CESTAT, New Delhi). Distinguished because that case concerned manufacture and classification under Heading 3303, whereas the present product was treated as an aqueous solution falling under Heading 3301.

FULL TEXT OF THE ORDER OF THE TAMIL NADU STATE APPELLATE AUTHORITY FOR ADVANCE RULING

1. In terms of Section 102 of the Central Goods & Services Tax Act 2017/Tamil Nadu Goods & Services Tax Act 2017 (“the Act”, in Short), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer or the Appellant within a period of six months from the date of the Order. Provided that no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the appellant has been given an opportunity of being heard.

2. Under Section 103(1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only

(a) on the Appellant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling;

(b) on the concerned officer or the jurisdictional officer in respect of the Appellant.

3. Under Section 103(2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed.

4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made.

At the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act are in pari materia and have the same provisions in like matter and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act, 2017 would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act, 2017.

2. The subject appeal was filed under Section 100(1) of the Tamil Nadu Goods and Services Tax Act, 2017/Central Goods & Services Tax Act 2017 (hereinafter referred to ‘the Act’) by M/s. TSR & Co., (hereinafter referred to as ‘Appellant’). The Appellant is registered under the GST Act vide GSTIN 33AGYPB5328G1ZC. The appeal was filed against the Advance Ruling No. 46/ARA/2026 dated 05.05.2026 passed by the Authority for Advance ruling, Tamil Nadu (hereinafter referred to as ‘AAR’) on the Application for Advance ruling filed by the Appellant.

3.1 The Appellant had applied for Advance Ruling vide application ARA-01 dated 21.11.2025, seeking a ruling on what is the appropriate tariff classification under GST HSN of ‘Pooja Panneer’ (Rose water) supplied exclusively for puja/ritual use in small retail packs, marketed as “Pooja Rose Water / Panneer”. The Appellant also claimed in their application that ‘Pooja Panneer’ (Rose water) qualifies for NIL rate under Entry No.167 of Notification No.10/2025 dated 17.09.2025 when supplied as puja samagri.

3.2 The AAR vide Ruling No. 46/ARA/2026 dated 05.05.2026, ruled as follows:-

The appropriate tariff classification of Rose water supplied by the applicant exclusively for puja/ritual use, marketed as “Pooja Rose Water / Panneer”, in small retail packs is 3301 9079.

3.3 On the claim of the Appellant that Pooja Panneer qualifies for NIL rate of duty, the Authority clarified that the product supplied by the applicant, i.e., rose water does not form part of the puja samagri as listed in Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 and thus is a taxable supply.

3.4 Aggrieved by the said ruling pronounced by the AAR, the Appellant has filed the present appeal. The Appellant has prayed that the impugned Advance Ruling dated 05.05.2026 be set aside; that it be ruled that puja panneer/rose water falls under ‘Puja Samagri’ and is exempt from GST; and that such further orders as are just and proper be passed.

4. Personal Hearing

4.1 The Appellant was given an opportunity to be heard on 25.08.2026. Ms. Sharanya Vijay K., Advocate and Ms. Srividya, S. U., Advocate, appeared for the personal hearing as the authorised representatives (AR) of M/s. T.S.R. & Co. in respect of the appeal filed against Advance Ruling no.46/ARA/2026 dated 05.05.2026.

4.2 The AR reiterated the submissions made by them in the ‘Grounds of Appeal’ filed along with the application. The AR submitted copies of case laws relied upon, relevant Notifications, Scriptural references and list of major buyers as additional submission. The AR informed that various scriptures prescribe bathing deities in such kind of fragranced water. They added that the market identity and end use of the product is for religious purposes and the marketing, labelling and pricing of the product is done by keeping in mind the intended purpose of the product. The AR argued that the list mentioned in Sl. No. 167 of Notification No. 10/2025/Central Tax (Rate) is an indicative list and not an exhaustive one. The AR quoted an example of Gangajal being exempted as puja samagri, though it does not form part of the said list. The AR also mentioned that the major buyers of the product are religious places. The AR also added that the classification is immaterial as long as the product is categorized under Sl. 167 of the Notification as puja samagri.

5. Discussions and Findings:

5.1 We have carefully examined the submissions made by the Appellant in their advance ruling application and the submissions made during the personal hearing. We have also considered the issue involved, the relevant facts and the Appellant’s submission / interpretation of law in respect of question on which the advance ruling is sought. The Appellant had informed that their product is manufactured by infusing the Deionized/RO potable water with natural rose distillate/hydrosol or rose essence (food-/cosmetic-grade), with no added alcohol or cosmetic actives. The Appellant further stated that the product is water used for devotional purpose and not a perfume or toilet water for personal application.

5.2 The Appellant has also submitted that the product is sold as ‘Alilai Krishnan Pooja Panneer’, in a transparent bottle labelled (in Tamil and English) as being ‘for religious purposes and external use only’, ‘for Puja use only’ and ‘not for cosmetic use’, and is supplied through puja stores, temple counters and devotional e-commerce rather than as a cosmetic, toilet water or room freshener.

5.3 We take note of this Appellate Authority’s Order No. AAAR/08/2026 (AR) dated 31.07.2026 wherein the Appellate Authority had condoned a delay of 6 days and take up the appeal for consideration on merits.

5.4 On going into the merits on the Appeal, we observe that the main contention of the Appellant is that their product Pooja Panneer, which is predominantly used for pooja purpose, ought to be exempted by categorizing it as a Puja Samagri under Sl. No. 167 of the Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025. In this behalf, the Authorised Representative, during the personal hearing, stated that the classification of the product is immaterial as long as their product is classified under Sl. No. 167 of the Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025.

5.5 Sl. No. 167 of the Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 is reproduced below for reference:

5.6 From the said Notification, it is seen that the supply of goods of ‘Any Chapter’ having description as mentioned in column 3 of the said Notification would be eligible for claiming exemption from the whole of the central tax leviable thereon under Section 9 of the Central Goods and Services Tax Act, 2017. The Chapter / Tariff Heading of the product Pooja Panneer (Rose Water) is irrelevant as far as the Notification is concerned. Also, the Appellant emphasized that the applicability or otherwise, of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 for the product manufactured by them is vital rather than the classification of the product. Therefore, we would initially handle the primary concern of the Appellant i.e., whether the product qualifies as ‘Puja Samagri’ under Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025.

5.7 The Appellant argues that the word, ‘namely’ used does not imply that the list is an exhaustive one. The Appellant relies on Ajanta Electricals Vs. CCE (1988) 35 ELT 34 (Punjab & Haryana High Court) to suggest that ‘namely’ takes its shade of meaning from context, and there held that the term did not confine ‘electrical lighting fittings’ to only the items named after it; on that ratio, ‘puja samagri, namely,’ should likewise not be confined to the ten items listed, and the panneer water/rose water/gulabjal used in puja and rituals should equally qualify as ‘puja samagri’. The Appellant also relied on M/s. Vee Nissan Electronics Vs. CCE (2004) 164 ELT 3 (SC), wherein the Hon’ble Supreme Court held that ‘namely’ in a tariff entry for ‘Musical Systems’ did not restrict the entry only to the items named thereafter. The Appellant further relied on the case law in respect of CST Vs. Bishram Tiwari (1971) SCC Online All 31, wherein the Hon’ble Allahabad High Court held that ‘namely’ has no fixed meaning and may, depending on context, mean ‘for example’ or ‘such as’ rather than an exhaustive enumeration. In the case of M/s. Vee Nissan Electronics Vs. CCE (2004) 164 ELT 3 (SC), the Hon’ble Supreme Court held that ‘the use of the word ‘namely’ in the Tariff item does not mean that only the items specified thereafter fall under the definition of the term ‘musical system’. It is clearly seen that the judgement was delivered in respect of entries in the Tariff items and not in respect of items mentioned in an exemption Notification. For reading exemption Notifications, appropriate case law would be Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Co. (2018) 9 SCC 1.

5.8 The Constitution Bench of the Hon’ble Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Co. (2018) 9 SCC 1 definitively ruled that exemption notifications must be construed strictly and the burden of proving applicability lies entirely on the assessee. The relevant part of the judgement is reproduced below for reference:

52. To sum up, we answer the reference holding as under –

(1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.

(2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue.

(3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands over-ruled.

5.9 It is also to be noted that in the case of State of Tamil Nadu vs Kasiraja Nadar [1981] 47 STC 337(MAD), wherein, the Hon’ble Madras High Court distinguished the ruling given in the case of CST Vs. Bishram Tiwari (1971) SCC Online All 31 and ruled that the word ‘namely’ has a restrictive meaning. The relevant parts of the judgement are reproduced below for reference:

17. As far as the word “namely”, is concerned, there can be no difficulty in understanding what exactly the word means. In the Concise Oxford Dictionary, the meaning of the word “namely” has been given as “that is to say”. In the Shorter Oxford English Dictionary, the meaning of the word “namely” has been given as “particularly”; “to wit”; “that is to say”; “videlicet”. In the Chamber’s Twentieth Century Dictionary the meaning of the word “namely” has been given as “by name”; “that is to say”. Consequently, there can be no doubt about the meaning of the word “namely”, that is, it is restrictive in the sense that the general expression which precedes the word “namely” is confined to the itemised expressions that follow the word “namely”. Consequently, the meaning of the word “namely” can only be restrictive and can be neither illustrative nor expansive.

20. With great respect, we are unable to agree with the learned Judges in their conclusion that the word “namely” has got no fixed meaning. Whatever that may be, as far as the present case is concerned, we have sufficiently indicated that these different words, “namely”, “for example”, “such as”, have been used both by the legislature and by the Government in different contexts and therefore we cannot proceed on the basis that the legislature and the Government used the different expressions loosely to mean one and the same thing. Therefore, we are unable to hold that the decision of the Allahabad High Court referred to above is of any assistance to understand the scope of the word “namely” occurring in the present notification with which we are concerned.

We find force in the views expressed by the Hon’ble Madras High Court as they are in line with the strict interpretation of exemption Notifications as mandated by the Hon’ble Supreme Court in the case of Dilip Kumar & Co. (Supra). Drawing analogy, we are of the view that usage of the word ‘namely’ does not permit expansion of a clearly exhaustive list of items on which tax is exempted.

5.10 The principle of ejusdem generis is equally inapplicable, as the entry does not close with words such as ‘etc.’ or ‘such other items’ that would signal an open-ended list. Had the legislature intended to exempt all items used in religious rituals, it would have used expressions such as ‘including’ or ‘such as’; the deliberate use of ‘namely’ followed by a closed inventory of ten items restricts the exemption strictly to those items. As Pooja Panneer’/‘Rose Water’ does not figure in that list, the Appellant cannot claim exemption under Entry 167 of the said Notification.

5.11 We observe that this reasoning is further strengthened by the fact that the GST Council, in its 14th and 15th meetings, discussed the issue of puja samagri in an elaborate manner. The relevant part of the discussion is reproduced below for reference:

Puja samagri:

9.3.1. The Secretary recalled that in the last Council meeting, it was decided to define Puja samagri and then to exempt it. The Joint Secretary (TRU-I), CBEC stated that as per the list provided by the State of Uttar Pradesh, puja samagri included the following items: (i) incense sticks commonly known as agarbatti, dhupkathi or dhupbatti (GST rate at 12%); (ii) Sambhrani or lobhana (proposed GST rate at 12%); (iii) Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd); (iv) Sacred thread (commonly known as yagnopavit); (v) Wooden khadau; (vi) Panchamrit, (vii) Vibhuti sold by religious institutions, (viii) Unbranded honey (proposed GST Nil) (ix) Wick for diya (x) Misri, batasha, bura (proposed GST rate 18%). He further stated that goods like incense sticks commonly known as agarbattis, dhupkathi or dhupbatti, sambhrani or lobhana were manufactured items and exempting them from GST would put domestic manufacturers of such goods at a disadvantage vis-a-vis imports and the agreed GST rate was 12%. He further stated that except the listed goods, namely, (i) incense sticks commonly known as agarbattis, dhupkathi or dhupbatti (to be taxed at GST rate of 12%); (ii) Sambhrani or lobhan (proposed GST rate 12%), (iii) Mishri, batasha, bura (proposed GST rate 18%), all other goods, namely, (i) Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd); (ii) Sacred thread (commonly known as yagnopavit); (iii) Wooden khadau; (iv) Panchamrit; (v) Vibhuti sold by religious institutions; (vi) Unbranded honey (GST rate already Nil); and (vii) Wick for diya could be kept at Nil GST, as part of Puja samagri. He added that in addition, lobhan, mishri and batasha could be kept at 5% (the same rate as for natural resin/sugar).

9.3.2. Starting discussion on this item, the Hon’ble Deputy Chief Minister of Gujarat suggested that agarbatti should also be kept under exempt category as it was a puja samagri and it was made at home after getting the agarbatti powder. The Hon’ble Ministers from West Bengal and Maharashtra supported this proposal. The Hon’ble Minister from Bihar observed that agarbatti was not prescribed in Vedas as puja samagri and only dhoop was used for puja. The Joint Secretary (TRU-I), CBEC, stated that agarbatti had substantial embedded Central Excise duty and also attracted VAT at the rate of 5%, and exempting them under GST would put the sector at a disadvantage vis-a-vis imported goods. The Hon’ble Minister from West Bengal suggested that the rate of tax on agarbatti should be 5%. The Secretary stated that tax on agarbatti was decided separately as it was not a puja item and despite the combined incidence of tax on agarbatti being about 14%, a 12% rate was suggested.

9.3.3. The Hon’ble Minister from Uttar Pradesh suggested that tax on lobhan, mishri and batasha should be kept at Nil rate. The Joint Secretary (TRU-I), CBEC, stated that mishri and batasha were kept at 5% as they were also in the nature of sugar items, and sugar was at 5%. After further discussion, the Council agreed to keep the puja samagri, namely (i) Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd); (ii) Sacred thread (commonly known as yagnopavit); (iii) Wooden Khadau; (iv) Panchamrit; (v) Vibhuti sold by religious institutions, (vi) Unbranded honey (already under Nil rate); and (vii) Wick for diya (viii) Roli, (ix) Kalava (Raksha sutra), (x) Chandan tika at Nil rate and lobhan, mishri, batasha and bura at 5%.

5.12 The Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 (superseded by Notification No.10/2025-Central Tax (Rate) dated 17.09.2025) was issued on the recommendation of GST Council, restricting the puja samagri to the ten items listed in the said Notification.

5.13 The Appellant’s submission that puja samagri historically bore no sales tax, VAT or Central Excise duty, and that the same policy continues under GST, does not assist the Appellant’s cause. The Appellant is correct to the extent that the policy of not taxing puja samagri continues under the GST regime. But the GST Council, after elaborate discussions, thought it fit to exempt only ten products used for puja purpose. A general historical practice of non-taxation, however long-standing, cannot be extended to a new or different taxation era unless the exemption is supported by a Notification in that particular statute.

5.14 The Appellant also points to a social media message dated 12.10.2023 by the CBIC Chairman clarifying that ‘Gangajal is used in pooja by households across the country and puja samagri is exempt from GST’, notwithstanding that Gangajal does not figure among the ten listed items — which, the Appellant submits, shows that the list was never intended to be exhaustive. The Hon’ble Supreme Court in CCE v. Ratan Melting & Wire Industries [(2008) 13 SCC 1] held that circulars, instructions, and administrative clarifications cannot dictate the interpretation of a statutory notification or override the law. An exemption must be found in the text of the notification itself. In the instant case, Pooja Panneer does not figure in the list of items mentioned as puja samagri in the Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, and no administrative statement regarding a different product can alter that position.

5.15 It needs to be considered that there are many items used in performance of religious rituals and out of all those items, only ten items are mentioned in the said Notification. Also, as is seen from the preceding paras, an elaborate discussion was held at the GST Council meeting on the items to be included in the list of Puja samagri. The Government issued the said Notification consequent to the outcome of such discussion, restricting the items to the ones listed in the said Notification. This aspect further highlights the intention of the Government not to extend the exemption to all the items used in the religious rituals.

5.16 For the sake of argument, assuming but not accepting that the list of items mentioned in the said Notification can be expandable, as was argued by the appellant, we see that the items should be of same class as those of the items already listed therein. The Pooja Panneer is not identical to any of the items mentioned in the list. In fact, pooja panneer is more akin to agarbattis, Sambhrani or Loban discussed in the GST Council meeting. Agarbattis, Sambhrani or Loban, Pooja Panneer are manufactured items unlike the items listed in the said exemption Notification. It was concluded in the meeting that exempting these manufactured items from GST would put domestic manufacturers of such goods at a disadvantage vis-a-vis imports.

5.17 After a comprehensive discussion on the issue of categorization of pooja panneer as ‘Puja Samagri’ as per Sl. No. 167 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, we conclude that the Appellant’s claim that Pooja Panneer can be considered as a Puja Samagri cannot be accepted.

5.18 Now that the appellant’s claim of Pooja Panneer being Puja Samagri as per the said Notification is rejected, we would take up the issue of its classification. The Appellant submits that classification is linked to usage. The Appellant relies on CCE Vs. Sharma Chemical Works (2003) 154 ELT 328, CCE Vs. Vipul Shipyard (1996) 88 ELT 640, Nat Steel Equipment Pvt. Ltd. Vs. CCE (1988) 69 STC 58, Bishambar Dayal Vs. Commissioner of Sales Tax (1963) 14 STC 184 to argue that common parlance and primary tests are required to arrive at the classification of goods.

5.19 We are of the opinion that while these cases emphasize common parlance and primary use, they do not permit bypassing statutory Chapter Notes. While common parlance is relevant, it cannot defeat a specific statutory definition or Chapter Note. The classification must be determined by the General Rules for the Interpretation of the Harmonized System (GRI) and the Statutory Chapter Notes. As held by the Hon’ble Supreme Court in Indian Aluminium Cables Ltd. v. Union of India, [1985 (21) E.L.T. 3 (S.C.)],

To sum up the true position, the process of manufacture of a product and the use to which it is put, cannot necessarily be determinative of the classification of that product under a fiscal schedule like the Central Excise Tariff. What is more important is whether the broad description of the article fits in with the expression used in the Tariff……

5.20 Further, the Hon’ble Supreme Court in O.K. Play (India) Ltd. v. CCE [(2005) 180 ELT 300 (SC)] held that:

Further, the scheme of the Central Excise Tariff is based on Harmonized System of Nomenclature (for short “HSN”) and the explanatory notes thereto. Therefore, HSN along with the explanatory notes provide a safe guide for interpretation of an Entry.

5.21 Chapter 33 covers “Essential oils and resinoids; perfumery, cosmetic or toilet preparations.” Heading 3301 covers “essential oils… aqueous distillates and aqueous solutions of essential oils,” while Heading 3303 covers “Perfumes and toilet waters.”

5.22 Chapter Note 3 to Chapter 33 states that:

3.- Headings 33.03 to 33.07 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packings of a kind sold by retail for such use.

5.23 Sub-heading explanatory notes for sub-heading 33.03 reads:

33.03 – Perfumes and toilet waters.

This heading covers perfumes in liquid, cream or solid form (including sticks), and toilet waters, designed to give fragrance primarily to the human body.

Perfumes and scents generally consist of essential oils, floral concretes, absolutes or mixtures of synthetic odoriferous substances, dissolved in highly concentrated alcohol. They are usually compounded with slightly perfumed adjuvants and a fixative or stabiliser.

Toilet waters, e.g., lavender water, eau de Cologne (not to be confused with the aqueous distillates and solutions of essential oils of heading 33.01) contain smaller proportions of essential oils, etc., generally in less concentrated alcohol than the perfumes described above.

5.24 From the above, it is seen that Chapter Note 3 to Chapter 33 unequivocally excludes “aqueous distillates and aqueous solutions of essential oils” from Heading 3303. The Note also states that the product should be suitable for use as goods of headings 33.03 to 33.07. Heading 3303 contains ‘Perfumes and toilet waters’. As seen from the above explanatory note, for a product to be classifiable under Chapter 3303, it should contain alcohol in varied concentrations; if the concentration is high, the product is covered under perfumes and if the concentration is low, it is covered under toilet water.

5.25 The Appellant’s submission that the proportion of synthetic rose perfume (Geraniol) used is ‘miniscule’, and therefore insufficient to characterise the product as an aqueous solution of essential oils, cannot be accepted. Neither Chapter 33 nor the General Rules for the Interpretation of the Customs Tariff prescribe any minimum threshold of concentration for a product to fall within the description ‘aqueous solutions of essential oils’ under Heading 3301; what is determinative is the character imparted to the water by the addition of the aromatic constituent, not its quantitative proportion.

5.26 The Appellant contends that ‘Other’ under 3301 90, being preceded by a single ‘-’, forms part of the goods referred to in Heading 3301, and that an item must otherwise qualify under Heading 3301 before it can be classified under 3301 90 as ‘Other’, applying the General Explanatory Notes for interpretation of the Customs Tariff.

5.27 Heading 3301 itself describes:

ESSENTIAL OILS (TERPENELESS OR NOT), INCLUDING CONCRETES AND ABSOLUTES; RESINOIDS; EXTRACTED OLEORESINS; CONCENTRATES OF ESSENTIAL OILS IN FATS, IN FIXED OILS, IN WAXES OR THE LIKE, OBTAINED BY ENFLEURAGE OR MACERATION; TERPENIC BY-PRODUCTS OF THE DETERPENATION OF ESSENTIAL OILS; AQUEOUS DISTILLATES AND AQUEOUS SOLUTIONS OF ESSENTIAL OILS

Aqueous distillates and aqueous solutions of essential oils thus expressly form part of Heading 3301 itself. The AAR has accordingly correctly classified the product under HSN 3301 90 79 (‘Aqueous distillates and aqueous solutions of essential oils — Other’). The Appellant itself presently classifies the product under 3301 90 60 as ‘Aqueous distillates of essential oils, not elsewhere specified or included’.

5.28 The Appellant’s reliance on Dabur India Ltd. Vs CCE (2015) 324 ELT 572 (CESTAT, New Delhi) is misplaced, as that decision concerned whether the process involved in the production gave rise to a commercially distinct products classifiable under the specific named entries of Heading 3303, whereas the present product, being an aqueous solution rather than a perfume or toilet water containing alcohol, falls under Heading 3301. As the AAR has classified the product as an aqueous solution of essential oil and not as an essential oil per se, Swastik Agency Vs. State of Tamil Nadu (1993) 90 STC 45 is likewise not applicable.

6. In view of the above findings and reasoning we arrive at the following conclusion:

i. “Pooja Panneer” is correctly classifiable under HSN Code 3301 90 79.

ii. The product does not qualify for exemption under Entry 167 of Notification No. 10/2025-Central Tax (Rate). The term “namely” introduces an exhaustive list of ten items as “Puja Samagri”. Since Rose Water/Pooja Panneer is not enumerated in the said list, it is not eligible for the exemption.

7. In view of the detailed discussion supra, we pass the following order.

ORDER

The ruling pronounced by the AAR in Advance Ruling No.46/ARA/2026 dated 05.05.2026 is upheld and we find no reasons to interfere with the same.