Author: Khushi J Prajapati
The Uttar Pradesh Authority for Advance Ruling (UP AAR) observed that while HSN code 1515 covers “Vegetable oils and fats, crude, refined, or otherwise,” this classification primarily pertains to edible oils.
The AAR examined the classification of ‘non-edible neem oil’ produced by M/S Pooja Solvent Private Ltd which the applicant claimed to be chemically modified and thus classified under chapter 31 of the Harmonised System of Nomenclature (HSN) fertilizer.
Upon thorough review, the AAR determined that the product in question despite being labeled as ‘ chemically modified’ did not undergo significant chemical changes that altered its essential character.
A chemical modification was not made just by reducing Azadirachtin levels. Consequently, the classification of the product under HSN code 15159020 was recommended by AAR which covers neem oil.
Moreover, it was also clarified by AAR that the applicant cannot get back any unutilized input tax credit according to Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022 because the tax rate on inputs is more than that on outputs.
Facts
In the case of M/S Pooja Solvent Private Limited, the applicant sought an Advance Ruling to determine the appropriate classification for their non-edible neem oil. The question raised by the company, which specializes in the plantation and processing of neem oil for Agricultural purposes only, was whether, since their product is not meant for consumption it should fall under any other HSN codes or qualify for claim of input tax credit. The query very much revolved around HSN code 1515 concerning non-edible Neem Oil versus its usage-based classification.
Case Details
Case Name: In re Pooja Solvent Private Limited
Advance Ruling Number: UP ADRG 03/2024
Date of Judgment/Order: June 6, 2024
Related Assessment Year: 2024
Court: Authority for Advance Rulings (AAR), Uttar Pradesh