4.
Sir
In continuation of your reply, please find the below further details. My understanding in this case is like this:
It is to be noted that a significant percentage of the hookah services effected are tobacco free. Such supplies without ‘tobacco’ consists of only organic flavours like honey, molasses, green apple etc.,Consequently, such supplies of hookah used for smoking in a water pipe without tobacco.
Notification No. 01/2017 – Compensation Cess (Rate) dated 28.06.2017 prescribes the rate of Compensation Cess to be charged on supply of specified goods or services. Entry No 19 and 20 of the said Notification provides for the rate of Compensation Cess payable on supply of “’Hookah’ or ‘gudaku’ tobacco bearing / not bearing a brand name. An extract of the said 2 entries is produced below for your immediate reference:
19. 2403 11 10 - 'Hookah' or 'gudaku' tobacco bearing a brand name – 72%
20. 2403 11 10 – ‘Tobacco used for smoking 'hookah' or 'chilam' commonly known as 'hookah' tobacco or 'gudaku' not bearing a brand name – 17%.
Keeping in mind the spirit of the above Notification, the moot question is, when assorted Hokaah blended as per the specific choice of the customers, which normally is combination of many verities of flavors as mentioned above, naturally the supply of hookah is unbranded or without bearing a brand name.
Facts being so, I am of the considered opinion that such type of " Hokaah not bearing a brand name" shall be liable for Compensation Cess @17% under below classified HSN.
20. 2403 11 10 – ‘Tobacco used for smoking 'hookah' or 'chilam' commonly known as 'hookah' tobacco or 'gudaku' not bearing a brand name – 17%.
Please share your valuable comments on this issue.
Regards.