GST Rates for Lamp Oil vs Edible Oil: Karnataka Ruling
The Karnataka Authority for Advance Ruling clarified that inedible lamp oils attract higher GST rates than edible oil mixtures.
- Ruling
- Advance Ruling No. KAR ADRG 11 / 2019 dated 25th June, 2019
- 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
- Lamp oils labeled as 'not for cooking' fall under Chapter Heading 1518.
- Edible oils and their mixtures are classified under lower-taxed headings 1511, 1515, 1517.
- Intended use determines the GST classification and applicable tax rate.
In short
The company asked the Karnataka Authority for Advance Ruling (AAR) to clarify the GST rates for their lamp oils and edible oil mixtures. They wanted to know if oils used for religious lamps, which are not meant for cooking, should be taxed the same as edible cooking oils. The authority examined whether these products were edible or inedible to determine the correct tax category.
What has changed
How it worked before
Businesses often assumed that oil mixtures used for religious purposes might qualify for the same lower GST rates applied to edible cooking oils.
What has changed
The authority ruled that because the lamp oils are explicitly for non-cooking use, they are classified as inedible mixtures under Chapter Heading 1518. This classification attracts a higher GST rate compared to edible oils. In practice, manufacturers must now distinguish between products intended for consumption and those intended for other uses, as this choice directly impacts the tax rate.
Who this affects
Manufacturers and traders of lamp oils, religious oils, or blended edible oils.
An example
Imagine a business, 'Divine Light Oils', that sells a blend of oils specifically for temple lamps. They might wonder if they can use the lower edible oil tax rate. Based on this ruling, because their product is marketed as inedible lamp oil, they would likely be required to use the higher tax rate under Chapter Heading 1518.
What you should do
This ruling only applies to the specific business that asked the question. If you sell similar products, do not automatically apply this classification to your own business. Consult with a tax professional to review your specific product labels and intended use before deciding on your GST rate.
If you do nothing
If you apply a lower tax rate based on a ruling that does not apply to you, a tax officer may issue a notice for tax evasion. You could be required to pay the difference in tax, along with interest and potential penalties. Relying on another company's ruling is not a valid legal defense during an audit.
The terms explained
- Chapter Heading
- A specific category code used in the tax system to classify goods for the purpose of determining the correct tax rate.
- Advance Ruling
- A formal decision provided by tax authorities to a business regarding how tax laws apply to their specific products or transactions.
- Inedible
- Products that are not suitable or intended for human consumption.
The ruling in detail
Authority for Advance Ruling
M/s Sri Kanyakaparameshwari Oil Mills
Advance Ruling No. KAR ADRG 11 / 2019 dated 25th June, 2019 · Karnataka
Questions before the authority
- What is rate of tax for “Perfumed Deepam Oil” which is prepared by mixing Gingely Oil, Palmoline Oil, Rice Bran Oil or any one oil with perfurme or chemical and used for lighting lamp for God (not for cooking) with HSN Code.
- What is rate of tax for “Non-perfumed Deepam Oil” which is prepared by mixing Gingely Oil, Palmoline Oil, Rice Bran Oil or any one oil without perfurme or chemical and used for lighting lamp for God (not for cooking) with HSN Code.
- What is rate of tax for a mixture of Gingely Oil, Palmoline Oil, Rice Bran Oil or any one oil.
Facts
The applicant is a partnership firm engaged in the manufacturing and trading of edible and non-edible oils. They intend to sell three specific commodities: perfumed oil for lamps, non-perfumed oil for lamps, and mixtures of edible oils. The applicant sought clarification on the classification and GST rates for these products, specifically noting that the lamp oils are intended for religious use and are not for cooking.
Ruling
| Question | What the authority ruled |
|---|---|
| Perfumed Deepam Oil | HSN 1518; 6% CGST, 6% KGST, 12% IGST Classified as inedible |
| Non-perfumed Deepam Oil | Chapter Heading 1518; 6% CGST, 6% KGST, 12% IGST Classified as inedible |
| Mixture of edible oils | Chapter Heading 1517; 2.5% CGST, 2.5% KGST, 5% IGST Classified as edible |
The Authority ruled that perfumed and non-perfumed lamp oils, being inedible, fall under Chapter Heading 1518 and attract a higher rate of tax. Conversely, individual edible oils and their mixtures intended for consumption fall under Chapter Headings 1511, 1515, or 1517 and attract a lower rate of tax. The ruling provides specific GST rates for both intra-State and inter-State supplies for each category.
Reasoning
The Authority determined that the classification depends on whether the product is edible or inedible. Edible oils and their mixtures are classified under Chapter 15, specifically headings 1511, 1515, and 1517, which attract lower rates under Schedule I. Because the applicant explicitly stated the lamp oils are 'not for cooking', they are considered inedible mixtures and are correctly classifiable under **Chapter Heading 1518**, which attracts higher rates under Schedule II. The ruling relies on the First Schedule to the Customs Tariff Act, 1975, and Notification No. 1/2017-Integrated Tax (Rate).
Provisions relied on
- Section 97 of CGST Act, 2017
- Section 98 of CGST Act, 2017
- Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017
- First Schedule to the Customs Tariff Act, 1975
For the practitioner
This ruling clarifies that the **intended use** of oil products as 'not for cooking' shifts their classification from edible oil headings to the inedible mixture heading 1518, resulting in a significantly higher tax burden. It provides a clear distinction for manufacturers of religious lamp oils versus edible oil traders. Practitioners should note that this ruling is specific to the applicant's stated facts regarding the inedible nature of their lamp oil products.
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/krntk_aar-11-2019-kanyaparmeswari.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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