In re Aorom Herbotech (GST AAAR Gujarat)
In the case of In re Aorom Herbotech, the Gujarat Appellate Authority for Advance Ruling (AAAR) addressed whether the appellant’s herbal cigarettes qualify as “medicinal cigarettes.” Aorom Herbotech argued that their product is rooted in Ayurvedic principles and cures diseases under the Ayurvedic practice of Dhoompana. However, the appellant failed to substantiate their claims with authoritative Ayurvedic texts or relevant manufacturing licenses. The Gujarat Authority for Advance Ruling (GAAR) had earlier concluded that the product could not be classified as a medicinal cigarette due to these deficiencies, a finding upheld by the AAAR.
The AAAR also examined whether the herbal cigarettes were designed to discourage smoking. The appellant’s promotional materials stated that their product aimed to help smokers quit by mimicking the sensation of smoking. This admission, along with the product’s composition, led the AAAR to classify it under HSN 24029010 as a cigarette substitute, rather than a medicinal product. The appellant’s assertion that their product does not contain nicotine and should therefore fall under Chapter 30 of the Customs Tariff was dismissed, as the AAAR found no evidence to justify this classification.
Further, the appellant claimed that their herbal cigarettes offered therapeutic benefits like relieving coughs and bronchitis. Despite this, the AAAR emphasized that the appellant lacked the requisite Ayurvedic or pharmaceutical manufacturing licenses. While the appellant obtained a UDYAM registration under MSME, it did not constitute regulatory approval for producing medicinal products.
