HSN Classification determines whether a soap is toilet or laundry soap, with corresponding GST rates applying accordingly.

Classification of soaps for GST follows the First Schedule to the Customs Tariff Act and HSN tariff descriptions; the Notification's schedule entries then fix rates. Toilet soap is identified by the HSN description for goods for toilet use under heading 3401 (HS 3401 11) and attracts the concessional rate in the Notification; other soaps, including laundry soaps under subheadings such as 3401 19 42, fall in the alternate schedule and attract the higher rate. Total Fatty Matter or dual consumer use does not alone determine classification; product description, declared/intended use, packaging and corresponding HSN subheading govern which Notification entry and GST rate apply.

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Issues: (i) The guiding principle for determining "toilet soap" under HSN 3401 as referred to in Schedule I, Entry No. 251 of Notification No. 9/2025-Central Tax (Rate), 2025; (ii) What constitutes "other soap (not toilet soap)" under Schedule II, Entry No. 66 of Notification No. 9/2025-Central Tax (Rate), 2025; (iii) Whether the applicant's soap (TFM >60% and dual-use) should be classified under HSN 3401 11 90 (toilet soap) or HSN 3401 19 42 (laundry soap); (iv) The applicable GST rate on toilet soap and on other (laundry) soap.

Issue (i): The guiding principle for determining "toilet soap" under HSN 3401 as referred to in Schedule I, Entry No. 251 of Notification No. 9/2025-Central Tax (Rate), 2025.

Analysis: Classification is to be carried out in accordance with the First Schedule to the Customs Tariff Act, 1975, applying HSN headings, section and chapter notes and rules of interpretation. Heading 3401 and its subheadings identify products for toilet use (HS 3401 11) and other soaps. The Notification adopts these tariff descriptions and mandates the applicable tax rates by schedule entry. There is no provision in the HSN or the Notification making Total Fatty Matter (TFM) a determinative criterion for classification.

Conclusion: The principle is that "toilet soap" is determined by the HSN description for goods for toilet use under heading 3401 (HS 3401 11), not by TFM alone.

Issue (ii): What constitutes "other soap (not toilet soap)" under Schedule II, Entry No. 66 of Notification No. 9/2025-Central Tax (Rate), 2025.

Analysis: The Notification and HSN distinguish soaps meant for toilet use from other soaps by reference to tariff headings and subheadings. HSN subheading 3401 19 covers "other" soaps including household and laundry soaps (for example 3401 19 42 for laundry soaps). The rules of interpretation and chapter notes govern this classification and the Notification places "other soap (not toilet soap)" in Schedule II.

Conclusion: "Other soap (not toilet soap)" comprises soaps falling under the HSN subheadings for other soaps (such as HS 3401 19 42 for laundry soaps) and is not classified as "toilet soap" under HS 3401 11.

Issue (iii): Whether the applicant's soap (TFM >60% and dual-use) should be classified under HS 3401 11 90 (toilet soap) or HS 3401 19 42 (laundry soap).

Analysis: The Authority examined the applicant's facts, product composition, lab reports and usage. While BIS standards refer to TFM for quality, the HSN/Notification classification turns on the tariff description and intended/declared use as per the rules of interpretation. The applicant's lab reports showing TFM >60% do not, by themselves, determine classification under HS 3401 11. Packaging, labeling, declared nature of the product and the description that corresponds to HSN headings are material. The applicant's own statements that it manufactures both toilet and laundry soaps and the absence of distinguishing declarations affect classification.

Conclusion: Classification depends on whether the product corresponds to the tariff description for toilet soap (HS 3401 11) or to other soap (HS 3401 19 42). TFM >60% or dual consumer usage is not by itself determinative; toilet soaps fall under HS 3401 11 90 and laundry soaps under HS 3401 19 42.

Issue (iv): The applicable GST rate on toilet soap and on other (laundry) soap.

Analysis: Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025 assigns rates to Schedule I and Schedule II entries. Schedule I, Sr. No. 251 (toilet soap under heading 3401) carries the concessional rate; Schedule II, Sr. No. 66 (other soaps) carries the higher rate. Once classification under the relevant HSN subheading is determined, the corresponding schedule entry prescribes the GST rate.

Conclusion: Toilet soaps (other than industrial soaps) under heading 3401 attract GST @ 5% (CGST 2.5% + SGST 2.5%) in terms of Sr. No. 251 of Schedule I to Notification No. 9/2025-Central Tax (Rate), 2025. Laundry/other soaps under heading 3401 attract GST @ 18% (CGST 9% + SGST 9%) in terms of Sr. No. 66 of Schedule II to Notification No. 9/2025-Central Tax (Rate), 2025.

Final Conclusion: The Authority answers that classification must follow the HSN/Customs Tariff description and Notification entries: products meeting the tariff description for toilet soaps fall under HS 3401 11 (toilet soap) and attract 5% GST; products meeting the tariff description for other soaps (including laundry soaps) fall under HS 3401 19 42 and attract 18% GST. TFM content or multipurpose consumer use alone does not override classification by tariff description; proper product description, labeling and corresponding HSN subheading determine the applicable rate.

Ratio Decidendi: For GST rate determination under Notification No. 9/2025-Central Tax (Rate), 2025, classification is governed by the First Schedule to the Customs Tariff Act, 1975 and the HSN descriptions (including chapter and section notes); once the correct HSN subheading is identified, the corresponding schedule entry in the Notification prescribes the applicable GST rate.

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