Classification of Epoxidised Soyabean Oil under GST: Specific Entry Prevails Over General Entry

The Epoxidised Soyabean Oil was classified under tariff item 1518 and subject to a 5% GST rate under Entry No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate). The authority determined that the product fell within the specific entry for chemically modified vegetable oils, prevailing over the general entry for inedible mixtures or preparations of fats or oils. The ruling was based on the alignment of the product's characteristics with Chapter Heading 1518 and supporting evidence from judicial precedents and Advance Rulings.

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Issues Involved:
1. Classification of Epoxidised Soyabean Oil under GST.
2. Determination of applicable GST rate for Epoxidised Soyabean Oil.

Issue-wise Detailed Analysis:

1. Classification of Epoxidised Soyabean Oil under GST:

The applicant, a manufacturer of Epoxidised Soyabean Oil (ESO), sought to classify the product under the appropriate tariff heading. The applicant argued that ESO, being a chemically modified vegetable oil, should be classified under Chapter Heading 1518 of the Customs Tariff Act (CTA), which aligns with the Harmonized System of Nomenclature (HSN).

The manufacturing process involves oxidizing refined soyabean oil using hydrogen peroxide and a catalyst, resulting in a product that retains its fundamental structure and physical appearance. The applicant supported their claim with HSN explanatory notes, which include epoxidised oils under Chapter Heading 1518, and judicial precedents from the Supreme Court emphasizing the alignment of the Indian tariff with HSN.

The applicant also referenced Advance Rulings and judicial decisions that supported the classification of similar products under Chapter Heading 1518. The applicant's additional submissions and laboratory reports confirmed that ESO is a chemically modified vegetable oil, further justifying its classification under Chapter Heading 1518.

The authority reviewed the manufacturing process and the chemical properties of ESO, concluding that it fits the description under Chapter Heading 1518, which covers chemically modified vegetable oils.

2. Determination of Applicable GST Rate for Epoxidised Soyabean Oil:

The applicant contended that ESO should be taxed at 5% GST under Entry No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate), which covers vegetable fats and oils that are chemically modified. The applicant argued that the specific entry for chemically modified vegetable oils should prevail over the general entry for inedible mixtures or preparations of fats or oils under Entry No. 27 of Schedule II, which attracts a 12% GST rate.

The applicant cited Rule 3(a) of the General Rules of Interpretation, which prefers the most specific description over general descriptions. They also referenced judicial precedents supporting the adoption of more beneficial classifications for the assessee.

The concerned officer initially suggested that ESO should be classified under Entry No. 27 of Schedule II, attracting 12% GST. However, the authority found that Entry No. 27 covers products not specified elsewhere, while ESO is specifically included under Entry No. 90 of Schedule I.

The authority also considered an Advance Ruling from Andhra Pradesh, which classified a similar product under Entry No. 90 of Schedule I, attracting 5% GST. They noted that other manufacturers and importers of ESO in India also classify the product under Chapter Heading 1518 and pay 5% GST.

Based on the detailed analysis and supporting evidence, the authority ruled that ESO is correctly classifiable under tariff item 1518 and is subject to 5% GST under Entry No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate).

Ruling:

1. Classification: Epoxidised Soyabean Oil is rightly classifiable under tariff item 1518.
2. GST Rate: GST at 5% is leviable as the product is specifically covered under Entry No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate).

This ruling is valid subject to the provisions under section 103(2) until and unless declared void under Section 104(1) of the GST Act.

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