Dettol is Medicine, 4% VAT Applicable under KVAT Act: Supreme Court

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By Aparna. M – On April 11, 2023 6:45 pm – 2 mins read

Dettol - VAT- KVAT Act - Supreme Court - taxscan

The Supreme Court in a recent case, held that Dettol is a medicine and therefore 4% Value Added Tax is applicable under the Kerala Value Added Tax Act, 2003.

Siddharth   Bawa, Advocate appeared for the appellant. C.K. Sasi ,Advocate  appeared for the respondent.

The aforesaid appeal was filed by the appellant Reckitt Benckiser (India) Ltd.for determining the tax rate of Dettol Antiseptic Liquid under the Kerala   VAT  Act, 2003.

Appellant contented that  ‘Dettol   Antiseptic   Liquid’   is correctly   classifiable   under   Entry   36(8)   (h)   (vi) being medicaments corresponding to HSN Code 3004.90   of   the   III   Schedule,   and   thus   also subject to tax at the rate of 4%.

 Counsel for the appellant submitted that,Dettol falls under HSN 3004 90 specifically incorporated in Entry 36(8)(h)(vi) of Schedule III, therefore Dettol is classifiable as a drug/medicine   under   Entry   36(8)(h)(vi)   of Schedule III.

Further the counsel submitted that active ingredients of Dettol are Chloroxylenol   IP,   Terpineol   BP, Alcohol   Absolute   IP   (denatured)   and   it   is   an antiseptic   having   germicidal   properties;   it   kills germs,   bacteria   and   it   prevents   infection therefore it is applied on wounds, cuts, grazes, bites   and   stings   and   is   used   in   hospitals   for surgical use, medical use and midwifery, due to therapeutic and prophylactic properties.

Counsel for the respondent submitted that a  medicament   is   an   item used for therapeutic or prophylactic treatment for prevention and cure of diseases.The High Court has specifically found that the appellant has no case that Dettol is able to prevent or cure any disease and therefore has rightly held the Dettol is not a medicament.   Therefore   the   Dettol   would   fall under residuary Entry.

After considering the contents of the single bench of the Justice M. R. Shah allowed the appeal of the appellant product Dettol would fall under Entry 36(8) (h)(vi) of Schedule III of the KVAT Act and shall be liable to be taxed at 4%.

Thereafter the bench observed that considering   the dominant use of Dettol and the active ingredients of  Dettol ,  it  is used as an antiseptic and is used in hospitals   for   surgical   use,   medical   use   and midwifery  due   to   therapeutic   and    prophylactic properties the same would fall under Entry 36(8) (h) (vi) as claimed by the appellant.To Read the full text of the Order CLICK HERE

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M/s Reckitt Benckiser (India) Ltd. vs Commissioner Commercial Taxes & Ors.


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