AAR Classifies Innovative ‘Mukhwas’ Capsules and Digestive Candies Under 5% GST

The applicant, Kartik Pinakin Bhatt, is a manufacturer of a unique type of mouth freshener and “mukhwas” delivered in a capsule form under the brand name “KAPSUL”. These capsules are plant-based, 100% vegetarian, and nicotine-free. The product range includes Paan Kapsul along with other digestive products like ChatPata Twins, Tangy Twins, Ginger Shots, Amla Shots, and GasGo Candy. While the Paan Kapsuls are manufactured by the applicant using ingredients like betel leaves, gulkand, and raw supari, the other digestive candies are purchased in bulk and repacked into capsule-sized blister packs.

The applicant sought clarification on the correct HSN classification and applicable GST rate for these products, especially since the raw materials used have varying GST rates.

Issues Before AAR: What is the correct HSN classification for the innovative “KAPSUL” mouth fresheners and the repacked digestive candies? What is the applicable GST rate for these final products given the mixed tax slabs of their raw materials?

AAR Decided: The Authority for Advance Ruling (AAR) determined that the products fall under two distinct HSN sub-headings within Chapter 21. The Paan Kapsul variants which contain raw supari but no lime or tobacco, were classified under HSN 2106 90 30 as “Betel nut product known as Supari”.

The second category of products, including ChatPata Twins and Amla Shots, were identified as digestive aids or “aftermints”. Rejecting the notion that they are “spices” under Chapter 9, the Authority classified them under HSN 2106 90 99 as “Food preparations not elsewhere specified or included”.

The Authority noted that as per Notification No. 9/2025-CT(R), goods falling under HSN 2106 (excluding Pan Masala) are taxable at 5%. Therefore, the AAR ruled that all eight products in question attract a GST rate of 5% (2.5% CGST and 2.5% SGST).

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