After targeting the popcorn industry in a similar classification row, GST authorities have now turned their attention to Hajmola. According to a CNBC-TV18 report, the DGGI’s Coimbatore zone has launched a probe into whether Dabur’s popular Hajmola candy should be taxed at 12% as an ayurvedic medicine or 18% as a confectionery.
Dabur maintains that Hajmola is rooted in Ayurveda and is not a “regular sugar-boiled candy,” qualifying it for the lower tax rate. The company had earlier won a similar case during the pre-GST era, when the Supreme Court ruled that Hajmola candy fell under the category of ayurvedic medicine, not confectionery.
This latest scrutiny adds to Dabur’s growing list of tax troubles. On April 1, the company disclosed an income tax reassessment order demanding ₹110.33 crore for FY2017-18. Authorities alleged wrongful claims on R&D deductions and disallowances under Section 14A of the Income-tax Act.
The regulatory challenges come as Dabur warns of sluggish growth in its latest financial update. For the March quarter, the company expects consolidated revenue to remain “flattish,” citing a dip in urban demand and inflationary pressure. Operating margins are projected to contract by 150–175 basis points.
Dabur’s India FMCG business is likely to decline in mid-single digits, the company said. However, international markets such as MENA, Egypt, and Bangladesh are expected to deliver strong double-digit growth. Nearly one-fourth of Dabur’s revenue now comes from global operations.
Among Dabur’s power brands are Dabur Chyawanprash, Real juices, Dabur Honey, PudinHara, Lal Tail, Amla hair oil, and Red toothpaste.
