HSN 1518 classification for castor oil from spent earth confirms 5% IGST under the relevant tariff entry.

Castor oil (non-edible) manufactured from spent earth was treated as falling under HSN 1518 after comparison with competing headings 1515, 1516 and 1517, because its nature and manufacturing process brought it within the relevant tariff scope. The applicable entry for vegetable fats and oils and their fractions under serial no. 90 of Schedule I of Notification No. 1/2017-Integrated Tax (Rate) therefore applied, so IGST at 5% was applicable. Refund-related questions were not examined because they were outside the scope of advance ruling proceedings.

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Issues: (i) Whether castor oil (non-edible) manufactured from spent earth is classifiable under HSN 1518 and chargeable to IGST at 5% under serial no. 90 of Schedule I of Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017.

Analysis: The product was examined against the competing headings in Chapter 15 of the Customs Tariff Act, 1975, namely 1515, 1516, 1517 and 1518. It was found that the goods were not covered by headings 1515, 1516 or 1517 on the basis of their nature and the manufacturing process. The relevant HSN explanatory notes for heading 1518 were also considered, and the product was treated as falling within the scope of heading 1518. Since the applicable entry for vegetable fats and oils and their fractions under serial no. 90 of Schedule I matched the goods, the rate of tax was held to be 5%.

Conclusion: The classification under HSN 1518 was upheld and IGST at 5% was held applicable in favour of the assessee.

Final Conclusion: The ruling answers the classification and rate question in favour of the applicant, while declining to answer the refund-related questions as outside the scope of advance ruling under section 97.

Ratio Decidendi: Where a product falls within the relevant tariff heading on the basis of its composition and process, and the applicable rate entry specifically covers that heading, classification and tax rate must follow the matched tariff entry and HSN guidance.

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