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Alankar Mishra

April 26, 2025

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Basics of GST

Scent Sprays GST Rates & HSN Code 9616 Explained

Taxation as a whole is both extremely complex and crucial. This is particularly true when examining wares like perfume sprays or scrutinising their search and seizure under the Income Tax Act. Recently, two seemingly unrelated yet perpendicular issues have emerged as equally significant:

HSN code and GST classification of scented sprays for toiletry purposes.

The legal and procedural consequences of income assessment of third party’s information under Section 153c.

In the following discussion, I will explain the classification of scent sprays under GST and subsequently provide a detailed analysis of Section 153c alongside its most crucial recent changes.

Overview Table

Topic	Description
Product Classification	Scent Sprays, Atomisers, Perfume Dispensers
HSN Code	9616
Applicable GST Rate	18%
Income Tax Section	Section 153C, Chapter XIV
Applicable Law	Income Tax Act, 1961
Related to	Assessment of income belonging to other persons in search/seizure cases
Last Amendment Year	£2,023

Scent Sprays and HSN Code 9616: What You Must Know

In India, scent sprayers, atomisers, deodorant pumps, or perfume sprayers are classified under HSN Code 9616.

What Is HSN Code 9616?

The HSN or Harmonised Nomenclature System is a worldwide classification created by the World Customs Organisation (WCO). Under the GST, every product is given an HSN code to maintain uniformity and clarity concerning the taxation of various items.

HSN Code 9616 includes:

Atomisers for perfumes

Toilet sprays

Other devices like them, whether refillable or non-refillable

Mounts and heads for scent sprays

GST Rate on Products Under 9616

As per the latest GST rate schedule:

HSN Code 9616 items attract a flat 18% GST rate.

This applies whether the item is manufactured locally or imported.

The tax rate includes Central GST (CGST) and State GST (SGST) and Integrated GST (IGST) for interstate or import transactions.

Common Business Use Cases

Businesses dealing in:

Cosmetics retail

Personal care and toiletry items

Online marketplaces like Amazon, Nykaa, Flipkart

Perfume and luxury scent brands

Must correctly mention HSN Code 9616 in your tax invoices, e-way bills, and GST returns to avoid legal discrepancies, audits, or penalties.

Key Compliance Tips

E-commerce Vendors: Use the correct HSN code in the product listing and backend GST filing.

Retailers: Check if the packaging mentions atomisers/sprayers — not all perfumes are under 9616.

Importers: Clarify product classification with customs if unsure

Input Tax Credit (ITC): Eligible for ITC if used in business; verify supplier GST invoices.

Now, Let’s Shift Focus to Section 153c of the Income Tax Act

Once you're sorted on the classification of toiletry products like scent sprays, it's time to focus on a critical but complex area of income tax law — Section 153c.

This section has been a hotspot for tax litigation, particularly during search and seizure operations.

What Is Section 153c of the Income Tax Act?

Section 153c deals with a special situation:

When incriminating material is found on the premises of one person (say Person A), but that material relates to another person (say Person B), then the tax authorities can assess Person B under this section.

In short: "Third-party assessment after search/seizure".

Legal Definition

As per Section 153c:

“Where the Assessing Officer is satisfied that any money, bullion, jewellery, or other valuable article or thing, or books of account or documents seized or requisitioned belong to any person, other than the person referred to in Section 153A, then the books of account or documents shall be handed over to the Assessing Officer having jurisdiction over such other person…”

When Is Section 153c Triggered?

During a search conducted under Section 132 or a requisition under Section 132a.

If the materials seized (ledgers, emails, cash, property papers) belong to another person.

If those materials contain information relating to the income of that third party.

Key Amendments to Section 153c (Up to 2023)

The section has seen major updates, especially to bring clarity and reduce misuse.

1. Ownership vs. Reference

Previously, 153c applied only if the seized material "belonged to" another person. Courts ruled this term strictly, leading to acquittals.

Amendment: Replaced "belongs to" with "pertains to or relates to", widening the scope of applicability.

Impact: Now, even if the material does not belong but relates to another person's income, an assessment can be made.

2. Six-Year Time Frame

As per the current law:

The AO can assess or reassess the income of the six preceding assessment years from the date of receipt of the seized material.

This 6-year limit is consistent with Section 153a (for the person searched.

3. Record of Satisfaction

Another key change involves the “Satisfaction Note”:

The AO must record satisfaction that seized material relates to the third party (under 153c).

If the AO of both persons is the same, he needs one satisfaction note.

If the AOS are different, the AO of the searched person hands over the material and notes to the AO of the other person.

Why this matters: Courts have quashed assessments where no satisfaction note existed.

4. Faceless Assessment Integration

As part of India's faceless assessment scheme, 153cc assessments may now be handled by centralised teams.

Promotes transparency

Eliminates local bias or harassment

All notices and responses are digital

Important Judicial Rulings on 153c

Several high courts and the Supreme Court have clarified ambiguities over the years.

Pepsi Foods Ltd v. ACIT (Delhi HC): Held that mere mention of a name is not enough — there must be a clear relationship to income.

CIT vs. Sinhgad Technical Education Society (SC): Assessment under 153c must be based on seized material only — not suspicion or assumptions.

PCIT v. N.S. Software (Delhi HC): A defective or absent satisfaction note makes 153c invalid.

Key Takeaways for Businesses and Professionals

If you’re a business involved in perfume sprays, atomisers, or toiletry appliances — classify them properly under HSN 9616 and apply 18% GST.

If you’re a tax consultant or CA dealing with search/seizure clients, understand the expanded scope of Section 153c.

If you’re being assessed under Section 153c, demand to see the satisfaction note and ensure the material is linked to your income.

Conclusion

From GST compliance on scent sprays to the third-party assessments under Section 153c, the modern Indian tax system leaves no space for error — but offers enough room for clarity if you know where to look.

While HSN Code 9616 brings standardisation in trade classification and taxation, Section 153c empowers the tax department to plug revenue leaks from undisclosed income, provided all procedural steps are correctly followed.

Whether you are in retail, e-commerce, or financial consulting, staying updated with these provisions isn’t optional anymore — it’s essential for survival in an increasingly digitised and scrutinised tax ecosystem.

FAQs

1. What is the HSN Code for scented sprays under GST?

The HSN Code for scent sprays, perfume atomisers and similar toiletry items is 9616 under GST in India.

2. What is the GST rate on scent sprays (HSN Code 9616)?

Scent sprays falling under HSN Code 9616 attract an 18% GST rate in India. This rate applies to both local sales and imports.

3. Are perfume bottles with built-in sprays also covered under HSN 9616?

Yes, any perfume or deodorant bottle that has a built-in spray or atomiser mechanism is classified under HSN 9616 and taxed at 18% GST.

4. What is Section 153c of the Income Tax Act?

Section 153c allows the Income Tax Department to assess the income of a person other than the searched person if materials seized during search operations relate to that third party.

5. When can Section 153c be applied?

Section 153c can be applied during an Income Tax search or seizure if documents, jewellery, cash, or other assets found relate to a person who was not directly searched but has potential undisclosed income.

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