Dabur's Hajmola Faces Intensifying GST Dispute; DGGI Investigates if it's Ayurvedic Medicine or Candy. A 12% GST applies if it's a medicine, while an 18% GST applies if it's a candy.
New Delhi. Is Dabur's popular Digestive Candy Hajmola an Ayurvedic Medicine or simply a Confectionery Product? This question has pitted GST Authorities and Dabur India against each other. The Coimbatore Zone of the Directorate General of GST Intelligence (DGGI) has initiated an investigation.
Hajmola Caught in GST Dispute
If Hajmola is classified as an Ayurvedic Medicine, it will attract a 12% GST. However, if treated as a Candy or a confectionery treat, an 18% GST will be levied. Dabur maintains that Hajmola is formulated based on Ayurvedic principles to aid digestion and is not merely a candy.
Previous Major Tax Dispute
Even before the implementation of GST, Dabur faced legal battles regarding the product's categorization. The government considered it a candy, while Dabur classified it as an Ayurvedic Product. The case reached the Supreme Court, which ruled in Dabur's favor, declaring Hajmola an Ayurvedic Medicine.
Similar Dispute Over Popcorn
Some time ago, confusion arose regarding Ready-to-Eat Popcorn. The GST Council later clarified:
- Unbranded and unpackaged salty Popcorn attracts a 5% GST.
- Pre-packaged & Branded Popcorn attracts a 12% GST.
- Caramel Popcorn (with added sugar) is classified as "Sugar Confectionery" and falls under the 18% GST slab.
What Do the Regulations Say?
According to the GST Council, any edible item containing extra sugar or flavor additives is considered confectionery rather than a general food item, attracting a higher GST rate.
Hajmola's Verdict?
The DGGI's ongoing investigation will determine whether Hajmola is merely a flavor-enhancing candy or a genuine medicinal Ayurvedic Digestive product. If classified as a candy, Dabur will face higher taxes and potentially backdated tax liabilities.
