In re Sapna Hitech Private Limited (GST AAR Maharashtra)
The present matter concerns an application filed before the Authority for Advance Ruling (AAR), Maharashtra, seeking clarification on the applicable GST rate for “Pooja Oil” proposed to be manufactured by the applicant.
The applicant proposed to manufacture “Pooja Oil” by blending various vegetable oils such as palm, rice bran, and soya oil (about 99%) with a small proportion of sesame oil (around 1%). The product would not undergo chemical modification and would remain technically edible. However, due to packaging and labeling requirements under regulatory norms, the product would be labeled as “Pooja Oil” and marked “Not for Human Consumption,” thereby positioning it as an inedible product intended for religious use.
The applicant contended that the product should be classified under Schedule I of Notification No. 01/2017-CT (Rate), specifically under entries relating to vegetable oils not chemically modified, attracting a lower GST rate of 5%. It argued that the entry covers both edible and inedible oils and that ambiguity in classification should be resolved in favor of the assessee. The applicant also relied on interpretational principles and judicial precedents to support classification under concessional entries.
On the other hand, the jurisdictional officer argued that the product, being an inedible mixture of vegetable oils, is specifically covered under Serial No. 27 of Schedule II of the said notification, which applies to inedible mixtures or preparations of vegetable oils not elsewhere specified. Accordingly, it was contended that the applicable GST rate should be 12%.
