Mumbai, 27 February 2026: The Maharashtra Authority for Advance Ruling (AAR) has delivered a significant ruling on the GST classification and applicable tax rate for ‘Pooja Oil’, a product proposed to be manufactured by Sapna Hitech Pvt. Ltd. The applicant sought an advance ruling on the rate of tax applicable to ‘Pooja Oil’ under the Maharashtra Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017.
Background and Submissions: Sapna Hitech Pvt. Ltd. proposed to manufacture ‘Pooja Oil’ by blending various edible vegetable oils, including a small percentage of sesame oil, and labeling the product as ‘Not for Human Consumption’ in compliance with FSSAI packaging and labeling requirements. The applicant argued that, despite being theoretically edible, the product would be marketed and sold as inedible oil for religious purposes. The applicant contended that the product should be classified under Entry 87 of Schedule I (HSN 1515) or Entry 90 of Schedule I (HSN 1518) of Notification No. 1/2017, both attracting a 2.5% GST rate.
The jurisdictional officer, however, maintained that ‘Pooja Oil’, being an inedible mixture, falls under Entry 27 of Schedule II (HSN 1518) of Notification No. 1/2017, and is therefore taxable at 12% GST (6% CGST and 6% SGST).
Court’s Analysis and Reasoning: The AAR examined the relevant tariff entries under Chapter 15 of the Customs Tariff Act, 1975, and the applicable GST notifications. The authority noted that Chapter Headings 15.07 to 15.15 cover single, non-mixed vegetable oils, while Heading 1518 covers animal or vegetable oils that are chemically modified or inedible mixtures or preparations of vegetable fats or oils not elsewhere specified.
The AAR observed that the applicant’s product is a mixture of various edible vegetable oils, not chemically modified, and is labeled and marketed as inedible for regulatory and commercial purposes. The authority held that the theoretical edibility of the oil is immaterial; what matters is the intended use, market positioning, and labeling, which clearly indicate the product is not meant for human consumption.
The AAR further clarified that the product does not fall under Chapter Headings 15.07 to 15.15 (single-source oils), nor under Heading 1516 (chemically modified oils), nor under Heading 1517 (edible mixtures). Instead, the product is appropriately classifiable under Heading 1518 as an inedible mixture of vegetable oils.
Applicable Tax Rate: The authority referred to Notification No. 9/2025 Central Tax (Rate) dated 17 September 2025, which superseded Notification No. 1/2017 and specified the tax rates for various goods. Entry 96 of Schedule I covers all goods under Chapter 1518, making them taxable at 2.5% CGST and 2.5% SGST (total 5%). The AAR found that the applicant’s product is not covered under any other schedule and thus falls squarely under this entry.
Final Ruling: The AAR concluded that ‘Pooja Oil’ manufactured by the applicant is chargeable to tax at 5% (2.5% CGST and 2.5% SGST) as per Entry 96 of Schedule I of Notification No. 9/2025 Central Tax (Rate), effective from 22 September 2025. This decision provides clarity on the GST treatment of blended vegetable oils marketed as inedible for religious use, resolving ambiguity regarding their classification and applicable tax rate.
Case Reported at:
Case Name: In re: Sapna Hitech Pvt. Ltd.
Case Citation: (2026) taxcode.in 62 AARGST
