The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification regarding the classification of a product known as DHA Algal oil. The CBIC responded to various references emphasizing the need for uniformity in classifying the imported product, which is extracted from marine algae and used in health foods for fortification purposes.
The CBIC clarification states that DHA Algal oil consists primarily of Docosa Hexanoic Acid (DHA) and is micro-encapsulated to enhance stability and ease of transportation. It contains impurities such as other fatty acids, free fatty acids, trans fatty acids, moisture, volatiles, and metallic minerals. The product also includes ingredients like sunflower lecithin, tocopherols, and rosemary extract for stabilization.
The issue of classification was previously discussed during the Chief Commissioners of Customs Conference in December 2018, where potential headings for classification, including 1302, chapter 15 (1515/1516/1517/1518), 2106, and 2916, were deliberated.
To ensure uniformity in classification, the CBIC refers to India’s commitment to implementing the World Customs Organization (WCO) Harmonised System of Nomenclature (HS) 2022. Amendments made to the Customs Tariff Act in 2021 specifically mention “microbial fats and oils” under Section III, Chapter 15, and headings 1515, 1516, 1517, and 1518 for classification purposes. The CBIC also highlights the Explanatory Notes with HS 2022, which indicate that microbial fats and oils, including DHA Algal oil, should be classified based on processing and chemical modification.
The CBIC clarifies that DHA Algal oil should be classified under the appropriate sub-heading of headings 1515, 1516, 1517, or 1518, depending on the characteristics and properties of the product. It further emphasizes that DHA Algal oil is not considered a distinct chemical but falls within the category of microbial fats and oils.
This clarification by the CBIC aims to provide clear guidelines and promote consistency in the classification of DHA Algal oil for import purposes. It will assist customs authorities and importers in properly assessing and categorizing this product.
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