TaxTMI 
TaxTMI 
2026 (3) TMI 720
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndry soap") and the applicable GST rate thereon. Read:- ARA-01 application 14.10.2025 (complete application with challan submitted on 17.10.2025) from M/s M/s Tarwani Soap Industries having its registered office at Dhusera, Village-Dewarbhatta, Manabasti, Abhanpur, Raipur, Chhattisgarh. [U/s 98 of the Chhattisgarh Goods & Services Tax Act, 2017 (hereinafter referred to as CGGST Act, 2017)] NO./STC/AAR/06/2025 Raipur Dated 12/01/2026 M/s Tarwani Soap Industries having its registered office at Dhusera, Village-Dewarbhatta. Manabasti, Abhanpur,Raipur, Chhattisgarh (hereinafter referred to as "The Applicant") is registered under GST, having GSTIN as 22AAOFT9412H1Z1, seeking advance ruling as to The Applicant seeks advance ruling on the following questions: (i) The definition or 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 the said notification: (iii) Whether, given the composition of the applicant's soap (having TFM>60%) and its dual-use nature....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... bathing and washing, as the soap contains more than 60% Total Fatty Matter (TFM), which aligns with the definition of "toilet soap" as per BIS Standards (IS 2888:2004) and trade parlance, however it is important to note that their product being primarily consumed in rural and backward areas is used by population residing in rural areas for washing too. 3. APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS:- In the absence of a statutory definition. the applicant relies on common parlance and industry standards, particularly BIS definition (IS2888:2004), which treats soap as "toilet soap" if it has TFM content of 60% or more. The applicant submits that classification should be based on composition and trade parlance rather than consumer usage patterns, which may vary in rural. 4. Personal Hearing:- Shri Uttamchand Tarwani (partner), Kaushal Tarwani (partner) along with their legal authorized representatives Shri Chetandas Tarwani (C.A.) and Shri Chetandas Tarwani (C.A.) of the applicant M/s Tarwani Soap Industries Raipur, attended the personal hearing in the matter before us on 10-11-2025. It was informed by the authorized representative that the applicant is engaged in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 60% TFM as toilet soaps. Based on the above BIS technical criteria and certified laboratory results, it was their submission that their products merit classification as toilet soap under HSN 3401. Accordingly, as per Notification No. 9/2025, toilet soap under this HSN is chargeable to GST at the rate of 5%, irrespective of its multipurpose usage by end consumers. Accordingly, they requested to consider the independent test reports and the above submissions while determining the correct classification and applicable tax rate under GST and sought the ruling in the matter. 5. The legal position, analysis, and discussion:- At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and the Chhattisgarh GST Act, 2017 [hereinafter referred to as "the CGST Act and the CGGST Act"] are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGGST Act, 2017. Now we sequentially proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case. 5.1 Section 96 of CG....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vices or both. We. therefore. admit the questions raised by the applicant for consideration on merits. 5.3 The comments on the issues raised by the Applicant in their ARA-01 application for Advance Ruling was sought for from the jurisdictional Central and State formations vide letter dated 16.10.2025, and no report / comments in the matter has been received from either of the field formations. 5.4 Now we move on to address the primary concern of the applicant which primarily revolves round the issue of classification of soaps manufactured / supplied by them, as per the extant provisions of GST law. In this context, it is worthwhile to mention here that Section 9 of the CGST Act and respective SGST Acts and Section 5 of IGST Act inter alia provides for levy of tax " on all intra-State / inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption [and un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor, for human consumption] ........ at such rates, not exceeding forty percent. as may be notified by the Government on the recommendation of the GST council and collected in such ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication of goods has to be done in accordance with Customs Tariff Act 1975. However, once the heading/tariff item is arrived at. the rate of GST would be governed by the relevant Notification. 5.6 In this backdrop, in the context of the questions raised by the applicant, we would first like to discuss the relevant provisions of GST law which have a direct bearing on the matter. Accordingly. the relevant text of GST Notification No. 9/2025-CT(Rate) dated 17.9.2025, which stipulates the rate of tax applicable on goods relevant to the issue in hand, is reproduced here under for ready reference:- GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) NOTIFICATION NO. 9/2025-Central Tax (Rate) New Delhi, the 17th September, 2025 In exercise of the powers conferred by sub-section (1) of section 9 and sub-section (5) of section 15 of the Central Goods and Services Tax Act. 2017 (12 of 2017), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 01/2017-Central Tax (Rate), dated the 28th June, 2017 published in the Gazette of India. Extraordinary. Part II. Section 3. Sub-section (i).....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., whether or not containing soap [other than toilet soap in the form of bars, cakes, moulded pieces or shapes]; organic surface active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent ..... ..... ..... 5.7 Now for arriving at the correct classification of the goods in question, we would also like to go through the text as is forthcoming in the HSN relating to CHAPTER 34 relating to SOAP, ORGANIC SURFACE-ACTIVE AGENTS, WASHING PREPARATIONS. LUBRICATING PREPARATIONS. ARTIFICIAL WAXES. PREPARED WAXES. POLISHING OR SCOURING PREPARATIONS, CANDLES AND SIMILAR ARTICLES. MODELLING PASTES, "DENTAL WAXES" AND DENTAL PREPARATIONS WITH A BASIS OF PLASTER. In this regard, it is seen that Heading no. 3401 covers in its ambit, SOAP; ORGANIC SURFACE-ACTIVE PRODUCTS AND PREPARATIONS FOR USE AS SOAP, IN THE FORM OF BARS, CAKES, MOULDED PIECES OR SHAPES, WHETHER OR NOT CONTAINING SOAP: ORGANIC SURFACE ACTIVE PRODUCTS AND PREPARATIONS FOR WASHING THE SKIN, IN THE FORM OF LIQUID OR CREAM AND PUT UP FOR RETAIL S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....undry soap" i.e. they are engaged not only in the manufacturing of toilet soap, but also laundry soap. In this regard, the common knowledge as regards Soaps and its types are that under the Drugs and Cosmetics Act, 1940 and the Cosmetic Rules, 2020, soap is generally considered a cosmetic if used for cleansing of skin. However, it is specifically defined as a product composed primarily of alkali salts of fatty acids. If a soap claims only to cleanse, it may not fall under the strict. comprehensive cosmetic regulations. but if it claims to treat skin (e.g., acne, germ-killing) or beautify. it becomes a regulated cosmetic or drug. The key aspects regarding soap under the regulations in vogue is that for a product to be classified or treated simply as "soap" and not a complex cosmetic, the product must consist of alkali salts of fatty acids (fats/oils combined with lye) and have no additional, therapeutic. or advanced beautifying claims. Further, that as per regulatory standing, if a soap has no additional claims (like moisturizing or deodorizing) and is marketed only for cleansing, it is generally exempt from the more stringent cosmetic regulations. Moreover. if the soap is market....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tains stronger surfactants. solvents. and abrasives. and is mass-produced in liquid. powder. or bar forms to handle severe, large-scale cleaning tasks. Further it is well known that laundry soap is not the same as toilet soap (bathing soap). They are formulated for entirely different purposes. Laundry soap is designed to clean fabrics with strong detergents and high alkalinity. whereas toilet soap is manufactured to be gentle on human skin. often containing moisturizers and a lower pH. Laundry soap has a higher. more alkaline pH to break down dirt on fabrics. Toilet soap has a neutral or slightly acidic pH to match the skin. Laundry soap often contains bleaching agents, enzymes, and fillers (e.g., sodium silicate, borax). Toilet soap uses higher-quality oils and contains perfumes and moisturizing agents. It also needs to be mentioned here that using laundry soap on the body can cause skin irritation or damage due to high alkalinity. While both are technically soaps, they are not interchangeable for skin cleaning. It is also known that in India. the Drugs and Cosmetics Act. 1940, along with the Cosmetics Rules, 2020, and the Legal Metrology (Packaged Commodities) Rules. 2011. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her than industrial soap) in the form of bars, cakes, moulded pieces or shapes manufactured and subsequently supplied by the applicant for washing of skin classifiable under Heading no. 3401.attracts tax @ 5% [CGST @ 2.5% + CGGST@ 2.5%] in terms of Sr. no. 251 of Schedule-I to Notification no. 9/2025-Central Tax (Rate) 2025 effective from 22.9.2025 read with the corresponding IGST Notification, whereas Laundry soaps in the form of cakes. moulded pieces or shapes, whether or not containing soap [other than toilet soap in the form of bars, cakes. moulded pieces or shapes], manufactured and subsequently supplied by the applicant for washing purposes classifiable under Heading no. 3401 attract tax @ 18% [CGST @ 9% + CGGST @ 9%] in terms of Sr. no. 66 of Schedule-II to Notification no. 9/2025-Central Tax (Rate) 2025, effective from 22.9.2025, read with the corresponding IGST Notification. 5.11 This authority would like to mention here that every transaction in itself is subject to the conditions and stipulations as mentioned in the work orders / contract / agreement and the facts governing the said transaction. Further, the legality and technicality as regard the manufacture and supp....