GST Rate for Inedible Vegetable Oil Used in Poultry Feed
Andhra Pradesh AAR ruled that inedible vegetable oil for poultry feed falls under HSN 1518 and attracts 5% GST.
- Ruling
- Ruling No. AAR/AP/06A (GST)/2018 dated 08.06.2018
- Dated
- 08 Jun 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Company asked for correct HSN code for Energy-G premium oil.
- Product is an inedible vegetable oil used in poultry feed.
- Authority ruled the product falls under HSN Code 1518.
- The product qualifies for a concessional 5% GST rate.
In short
Agarwal Industries Private Limited asked the Andhra Pradesh Authority for Advance Ruling (AAR) to clarify the tax classification for its product, Energy-G premium oil. The product is an inedible vegetable oil substitute used as an ingredient to manufacture poultry feed. The company wanted to know the exact Harmonised System of Nomenclature (HSN) code and Goods and Services Tax (GST) rate applicable under order AAR/AP/06A(GST)/2018.
What has changed
How it worked before
Businesses manufacturing processed inedible vegetable oils for animal feed were often unsure whether to classify them under general industrial oil codes at higher tax rates or under specific reduced-rate HSN categories.
What has changed
The authority ruled that modified inedible vegetable oils used for poultry feed fall under HSN Code 1518. Under Schedule I of Notification No. 1/2017-Central Tax (Rate), this classification attracts a lower GST rate of 5%.
Who this affects
Businesses that manufacture or sell non-edible processed vegetable oils and fat-based ingredients used in poultry feed or animal feed.
An example
A manufacturer in Telangana produces a non-edible vegetable fat additive used exclusively to make cattle feed. They are unsure whether to charge 5% or 18% GST. Based on order AAR/AP/06A(GST)/2018, if their product is derived from vegetable fats and unfit for human consumption, HSN 1518 at 5% GST is the appropriate category. However, the manufacturer must obtain their own ruling or tax advice before applying this rate.
What you should do
Review your product's raw materials and end-use to see if it matches HSN 1518. Keep in mind that an advance ruling binds only the business that applied for it and its local GST office. If you want legal certainty for your own product, apply for a separate advance ruling with your state GST authority.
If you do nothing
If you adopt a 5% GST rate simply because another company got this ruling, your local GST officer can challenge your classification during an audit. If the officer decides a higher tax slab applies, you will have to pay the tax shortfall along with interest and late penalties. This can create unexpected financial liability and unnecessary tax disputes.
The terms explained
- HSN Code
- An international system of numbers used in GST to classify goods and determine their exact tax rate.
- Advance Ruling
- An official tax decision given by authorities to a specific business clarifying how GST rules apply to their transaction.
- Input Tax Credit
- The GST you pay on business purchases that you can subtract from the GST you collect on sales.
The ruling in detail
Authority for Advance Ruling
M/s Agarwal Industries Private Limited
Ruling No. AAR/AP/06A (GST)/2018 dated 08.06.2018 · Andhra Pradesh
Questions before the authority
- Requesting for the clarification of Correct HSN Code of their product i.e "Energy-G premium oil".
Facts
The applicant is engaged in manufacturing ingredients for poultry feed, specifically an inedible substitute for rice bran oil marketed as Energy-G premium oil. The product is not fit for human consumption and is used purely for manufacturing poultry feed. The applicant submitted that the product is processed from vegetable fats and oils rather than animal fats or oils.
Ruling
| Question | What the authority ruled |
|---|---|
| HSN Code and tax rate for Energy-G premium oil | HSN 1518, 5% GST Applies to inedible vegetable fats/oils processed for poultry feed |
The Authority ruled that the correct classification for Energy-G premium oil is **HSN 1518** under S.No. 90 of Schedule I to Notification No. 1/2017-Central Tax (Rate). Accordingly, the product attracts **5% GST**.
Reasoning
The Authority reviewed the manufacturing process and raw materials, confirming that the product is manufactured out of vegetable fats and oils and not animal fats or oils. HSN Code 1518 covers vegetable fats and oils and their fractions that are modified or processed and excluded from heading 1516. Since the product falls under this description, it is covered under S.No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate), attracting a **5% tax rate**.
Provisions relied on
- HSN Code 1518
- Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017
- Section 98(1) of CGST Act, 2017 / APGST Act, 2017
For the practitioner
Confirms that inedible vegetable oil substitutes used for poultry feed preparation fall under **HSN 1518** taxable at **5% GST** under Schedule I. It helps tax practitioners classify non-edible modified vegetable fats used in animal feeds.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/ap_06a-2018_08.06.18_agarwal_indus.pdf
Legibility of the scan, as read: high.
Prepared 19-10-2026.
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