The Authority for Advance Rulings ( AAR ), Mumbai held that Natural Ester Dielectric Fluid (Envirotemp FR3) falls under the description of ‘inedible preparation of vegetable oils’ and is taxable at 12% Goods and Services Tax.
The Applicant, Cargill India Private Limited, is a subsidiary of Cargill Inc. and is engaged in the business of processing, refining and marketing imported and indigenous vegetable oils. One of the products manufactured by the applicant is Natural Ester Dielectric Fluid (Envirotemp FR3). The applicant has sought the clarification of the Authority regarding whether Envirotemp FR3 being a chemically modified vegetable/soybean oil is classifiable under Entry 90 of Schedule I of Notification No.1/2017-State Tax (Rate) issued under the Maharashtra Goods and Services Tax (MGST), 2017 and Notification No.1/2017- Central Tax (Rate) issued under the Central Goods and Services Tax (CGST), Act 2017 is taxable at the rate of 2.5 % (State and Central tax) or Whether it can be said to be a mixture of inedible vegetable oil which is not elsewhere classified, hence fall under entry 27 of Schedule II of Notification No. 1/2017-State Tax (Rate) issued under the MGST Act, 2017 and Notification No.1/2017- Central Tax (Rate) issued under the CGST, Act 2017 is taxable at the rate of 6 % (State and Central tax).
The Authority comprising of Members B.V. Borhade & Pankaj Kumar observed that the product of the applicant is a preparation from vegetable oil and is derived from soybean Oil. The product being inedible, the authority further observed that it could be covered by the description “inedible preparation of vegetable oils”. Consequently, it held that the product Envirotemp FR3 falls under Serial No 27 of Schedule II of Notification under MGST, Act 2017 and is taxable at the rate of 12%.
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