Laundry Soap Below 500 Grams Not Eligible for 5% GST Concession: West Bengal AAR

The West Bengal Authority for Advance Ruling (AAR) has held that laundry soap bars weighing less than 500 grams are not eligible for the concessional GST rate of 5% applicable to toilet soaps. The Authority ruled that such products would continue to attract GST at 18% (9% CGST + 9% SGST) under HSN 34011942.

The applicant was engaged in manufacturing laundry soap bars weighing less than 500 grams and argued that its products should qualify as “toilet soap” taxable at 5% under Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025. The applicant contended that the soaps contained Total Fatty Matter (TFM) above 60%, similar to toilet soaps prescribed under BIS standards, and were manufactured using the same saponification process as bathing soaps.

It was further argued that consumers, particularly in rural areas, often use the same soap bars for bathing and washing clothes, and therefore laundry soap and toilet soap should be treated similarly for GST purposes.

However, the AAR rejected the contention and drew a distinction between toilet soap and laundry soap based on composition, intended use, BIS specifications, and tariff classification under the Customs Tariff Act, 1975.

The Authority observed that toilet soaps are primarily intended for personal hygiene and skin cleansing, whereas laundry soaps are specifically formulated for washing clothes and removing stains. It noted that both products differ in ingredients, pH value, additives, and commercial understanding.

The AAR also referred to BIS standards under IS 2888:2004 for toilet soaps and IS 285:1992 for laundry soaps, observing that the two products have separate technical specifications and chemical characteristics. Merely having a TFM above 60% could not convert a laundry soap into a toilet soap.

Further, the Authority noted that the applicant itself marketed the product as “laundry soap” and that under the Customs Tariff Act, toilet soaps and laundry soaps are classified separately. Toilet soaps fall under tariff heading 340111, whereas laundry soaps weighing less than 500 grams are specifically covered under tariff item 34011942.

Thus, the Authority ruled that the concessional GST rate of 5% under Serial No. 251 of Schedule I applies only to toilet soaps and not to laundry soaps.

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