Ayurvedic herbal products HSN Code

The Essential Guide to Ayurvedic Herbal Products HSN Code

In the world of health and wellness, Ayurvedic herbal products have a special place. For businesses and consumers in India, navigating the GST (Goods and Services Tax) landscape for these products requires a clear understanding of their HSN (Harmonized System of Nomenclature) code. The HSN code helps classify goods for tax purposes, and for Ayurvedic products, this classification depends on their specific nature and use.

The Right HSN Code

Ayurvedic herbal products are primarily classified under Chapter 30 of the HSN code system, which covers “Pharmaceutical products.” The main HSN codes for these products are:

• 3003: This heading is for “Medicaments…consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses.” If the product is not in measured doses or in retail packaging, it falls under subheadings like 30039011, specifically for “Medicaments of Ayurvedic system.”
• 3004: This heading is for “Medicaments…consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses…or in forms or packings for retail sale.” The sub-code 30049011 is for “Medicaments of Ayurvedic system” in this category.

Understanding the GST Rate

The GST rate for most Ayurvedic medicines, whether they are in retail packaging or not, is 12%. This rate has been in effect since July 1, 2017. However, it’s important to note that the GST rate on some Ayurvedic products can be lower or higher depending on their classification:

• 5% GST: Some traditional Ayurvedic medicines that are purely composed of herbal ingredients and are considered essential may fall under a 5% GST rate. This often applies to products without a brand name or those following classical texts.
• 18% GST: If an Ayurvedic product is classified as a cosmetic or a luxury item, it may attract a higher GST rate of 18%. This can apply to products like certain hair oils, face creams, or other beauty care items, even if they contain herbal ingredients.

The Importance of Correct Classification

The distinction between a medicine, a cosmetic, and a general food supplement is crucial for determining the correct HSN code and GST rate. Products marketed for therapeutic or prophylactic use are generally considered medicaments, while those for skin or hair care are often classified as cosmetics. Accurate classification ensures proper GST application, which is vital for both business compliance and consumer trust. Always refer to official government notifications or consult a tax professional for the most up-to-date and specific guidance.