Pooja Oil is Inedible Mixture taxable at 12% GST: AAR [Read Order]

Pooja Oil - GST - Taxscan

The Authority of Advance Ruling ( AAR ) in Karnataka has ruled that, the ” Pooja Oil “, classified under tariff heading 1518, being inedible mixture gets covered under entry number 27 of Schedule – II of the Notification No.01/2017-CT (R) dated 28.06.2017, as amended, and hence is taxable at 6% under CGST Act, 6% under KGST Act and 12% under the IGST Act.

The Applicant is a Partnership firm and is a wholesale dealer in edible oils, ered under the Goods and Services Act, 2017. The applicant, as part of their manufactures “Pooja Oil”, which is primarily a mixture of rice bran S.K Agrotech sesame oil (gingelly oil), coconut oil and mahua oil. A small quantity of fragrance also is mixed only for giving fragrance.

The AAR was considered the question, Whether “Pooja oil” can be classified under tariff item 1518 of Schedule-1 (taxable at 5%.) or Schedule-II (taxable at 12) of Notification No.01/2017- CT(R) dated 28.06.2017, as amended from time to time?

The AAR observed that, “It is an admitted fact that the said product is manufactured by mixing 5 edible oils i.e. rice bran oil, coconut oil, castor oil, mahua oil and Gingely Oil, in an agreed percentage and then blended with fragrance. The process of addition of perfume to the mixture of edible oils converts the said mixture into an inedible mixture”.

The AAR also said that, “Comparison of the two aforementioned entries clearly brings out that an inedible mixture of vegetable oils are specifically mentioned by and covered under Sl. No. 27 in Schedule II. The entry at Si. No. 90 in Schedule I applies to vegetable oils which have been subject to processes like boiling, oxidation, dehydration, sulphurisation, blowing, polymerization and by heat in vacuum or in inert gas or otherwise chemical modification. The resultant product remains edible despite undergoing the aforementioned processes. However, once the fragrance has been added to the mixture of several edible oils, the resultant product becomes inedible and entry at Si. No. 27 of Schedule II specifically covers inedible mixtures of vegetable oils. Therefore the product “pooja oil’ finds a very specific entry in Schedule II. Thus it is more appropriately covered under Sl. No. 27 in Schedule II of the said Notification and accordingly taxable at 12% GST”.

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