Turmeric Extract Nutraceutical Taxable at 5% GST: Kerala AAR

In re CSM Universe Pvt Ltd (GST AAR Kerala)

Summary: The Kerala Authority for Advance Ruling held that “Turmeric Extract / Curcuma Elixir” manufactured and supplied by CSM Universe Pvt Ltd is appropriately classifiable as a nutraceutical/dietary supplement under HSN 2106 as a food preparation not elsewhere specified or included, rather than as a medicament under Chapter 30 or an essential oil/aromatic preparation under Chapter 33. The applicant initially claimed medicament classification on the basis of turmeric’s medicinal and health-protective properties, but subsequently submitted that the product was manufactured through a traditional Ayurvedic water-extraction process, held an FSSAI licence as a nutraceutical/food supplement under Food Category 13.6 and was appropriately classifiable under HSN 2106.

The Authority noted that the chemical examination report showed approximately 99.9% moisture/water with only a minuscule trace of curcumin. The product was marketed for general wellness, immunity, antioxidant benefits, joint health and nutritional support, without claims relating to diagnosis, treatment, cure or prevention of any specific disease.

Applying the common parlance, essential character and principal-use tests, the Authority held that mere presence of ingredients possessing medicinal properties does not make a product a medicament. It also rejected Chapter 33 classification because no essential oil was extracted or separated, the product did not possess the essential character of an aromatic or odoriferous preparation, and it was supplied for direct human consumption. The Authority held that the product was taxable at 18% GST under HSN 2106 under Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017.