GST Classification of “Pooja Panneer” (Rose Water): Not Puja Samagri, Taxable at 18%

Background of the Advance Ruling

The Tamil Nadu Authority for Advance Ruling (AAR) in In re T.S.R. & Co. (GST AAR Tamilnadu) considered whether “Pooja Panneer” (Rose Water), supplied specifically for religious rituals, could be treated as exempt puja samagri under GST or whether it was liable to tax and, if so, under which HSN it should be classified.

The assessee, M/s T.S.R. & Co., is registered under the GST law and manufactures and supplies rose water marketed as “Pooja Rose Water / Panneer”. The product is promoted as suitable for:

  • abhishek,
  • deity cleaning and sprinkling,
  • consecration, and
  • aarti welcome

for Hindu, Jain, Sikh and other Indian rituals. The assessee approached the AAR seeking certainty on the correct tariff classification and taxability.

Question Before the AAR

The assessee sought an advance ruling on a single issue:

What is the correct HSN classification under GST for “Pooja Panneer” (Rose Water) supplied exclusively for puja/ritual use and sold in small retail packs as “Pooja Rose Water / Panneer”?

The product was, at the time of application, being classified by the assessee under HSN 33019060 and taxed at 18% GST, but the assessee claimed it should instead be treated as exempt puja samagri.

Product Description and Business Model

According to the submissions:

  • The rose water is produced by mixing deionized/RO potable water with natural rose distillate/hydrosol or rose essence (food-/cosmetic-grade) or synthetic rose perfume, without:

    • alcohol, or
    • cosmetic actives.

  • It is expressly not positioned as a perfume or toilet water for personal use but as devotional-use water.

  • Packs are sold in small bottles (for instance, 50 ml, 100 ml, 200 ml, 500 ml) with clear labels such as:

    • “For Puja Use Only”
    • “Not for cosmetic use”
    • description: “Pooja Panneer (Rosewater)”

  • Distribution channels include:

    • pooja stores,
    • temple counters, and
    • devotional online platforms.

Historically, the trade had treated such rose water as puja samagri and enjoyed exemption under earlier VAT/excise regimes, and the assessee contended this treatment should continue under GST.

1. Claim of Exemption as Puja Samagri

The assessee relied on:

  • Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, and
  • its successor Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, particularly Entry 148 / Serial No. 167, which exempts:

“Puja samagri” from Any Chapter.

Entry 167 of Notification No. 10/2025-Central Tax (Rate) lists:

  • rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya;
  • sacred thread (yagnopavit);
  • wooden khadau;
  • panchamrit;
  • vibhuti sold by religious institutions;
  • unbranded honey;
  • wick for diya;
  • roli;
  • kalava (Raksha sutra);
  • chandan tika.

The assessee argued that use of the words “Any Chapter” shows that puja samagri can belong to different tariff chapters and that the core test is devotional character and market identity, not the inherent physical nature of the product.

2. Functional and Market Identity Test

To reinforce the exemption claim, the assessee submitted that:

  • The product’s essential character is its ritual application, similar to panchamrit and chandan tika, both specifically named in the notification.
  • The product is manufactured, packed, labelled and sold solely for religious use, and not as a cosmetic or room freshener.
  • Judicial and AAR decisions have considered both end-use and market recognition while classifying religious goods, such as diya wicks and panchamrit.

The assessee, by analogy, considered “Pooja Panneer” as a quintessential puja samagri.

3. CBIC Clarification on Puja Samagri and Holy Water

The assessee referred to a CBIC social media clarification dated 12 October 2023, which stated that Gangajal, used in puja, is exempt because puja samagri is exempt under GST and that this position flowed from decisions of the 14th and 15th GST Council meetings (May–June 2017).

Based on this, the assessee argued that:

  • rose water / panneer is functionally similar to “holy water” used in rituals, and
  • when supplied for puja purposes, it should be treated as part of the same exempt category as puja samagri.

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