Ayurvedic medicine classification turns on classical or proprietary formulation, label disclosure, and corresponding tax treatment. Classification of Ayurvedic medicines for tax purposes depends on whether the product is a classical medicine or a proprietary medicine. Classical medicines are manufactured according to the names, formulas and methods described in authoritative books listed in Schedule I of the Drugs & Cosmetics Act, 1940, with the relevant book named on the label, and are stated to fall in the 5 percent tax category. Proprietary medicines are prepared on self-developed formulas, with ingredient details and product name shown on the label, and are stated to fall in the 12 percent tax category.