In re Tarwani Soap Industries (GST AAR Chhattisgarh)
The Authority for Advance Ruling, Chhattisgarh issued a ruling under the Central Goods and Services Tax Act, 2017and corresponding state law on the classification and applicable GST rate for soaps manufactured and supplied by a Chhattisgarh-based manufacturer.
The applicant manufactures soap primarily using the saponification process involving vegetable oils or animal fats along with sodium hydroxide and perfumes. According to the facts placed before the authority, the product contains more than 60% Total Fatty Matter (TFM) and is used for personal hygiene such as bathing as well as laundry purposes depending on consumer preference. The applicant stated that the soap is produced mainly for rural markets where a single product is often used for both bathing and washing purposes.
The applicant sought an advance ruling on three issues: the principle for determining “toilet soap” under heading 3401 of the Customs Tariff; the meaning of “other soap” under Schedule II, Entry 66 ofNotification No. 9/2025-Central Tax (Rate); and whether the soap manufactured by the applicant, having a dual-use nature, should be classified as toilet soap or laundry soap for GST purposes.
The manufacturer submitted that classification should be based on the composition and industry standards rather than consumer usage patterns. The applicant emphasized that soaps with TFM content exceeding 60% are commonly understood in trade and standards as toilet soap. Laboratory testing was also conducted by the Bureau of Indian Standards to determine the nature of the product independently. According to the test results, the soap manufactured by the applicant contained TFM above 60%, which aligns with BIS standards for toilet soap.
