Dabur India’s Hajmola candy is under scrutiny from the Directorate General of GST Intelligence (DGGI) over its classification as an ayurvedic medicine.
The Coimbatore zone of the DGGI is investigating whether Hajmola should be classified as an ayurvedic medicine, attracting 12 per cent GST, or as a candy, taxed at 18 per cent, according to a CNBC-TV18 report.
The company maintains that Hajmola candy is an ayurvedic formulation and “not a regular sugar-boiled candy”.
This isn't the first time Dabur has found itself in a classification tangle over Hajmola.
In the pre-GST era, a similar dispute had reached the Supreme Court. The court ruled in favour of Dabur, affirming Hajmola’s status as an ayurvedic medicine rather than a confectionery product.
While the current GST matter plays out, Dabur is already dealing with a tax issue.
On April 1, the company disclosed that it had received an income tax reassessment order for Rs 110.33 crore for the financial year 2017-18. The order accuses Dabur of making incorrect claims related to tax deductions for in-house research and development and under Section 14A of the Income-tax Act, 1961.
Dabur’s portfolio includes brands such as Dabur Chyawanprash, Real juices, Dabur Honey, PudinHara, Lal Tail, Amla hair oil, and Red toothpaste.
This development comes amid mounting criticism of India’s tax regime.
In December 2024, the GST Council's decision to tax popcorn differently depending on whether it contains sugar or spice drew sharp criticism.