AAR holds that ‘Natural Easter Dielectric Fluid’ (known as ‘Envirotemp FR3’) is liable to GST at 12% under Sl. No. 27 of Schedule II of Notification No. 1/2017-Central Tax / State Tax (Rate), in lieu of 5% under Sl. No. 90 of Schedule I of said Notification; Finds that prior to GST, the product was being cleared under Tariff Heading 5180039 but under the new regime, Schedule Entry 90 covers portion of Tariff Heading 1518 relating to vegetable fats and oils and their fractions whereas Schedule Entry 27 covers portion relating to animal fats and oils and their fractions, in addition to inedible mixtures or preparations of animal or vegetable fats or oils or fractions of different fats or oils of Chapter 15 not elsewhere specified or included; Notes that said FR3 Fluid is soya bean based roduct used as a coolant and insulator in high voltage electric transformers, where certain ingredients in the form of additives and chemicals are added to vegetable oils to make them function as substitute for mineral oil in ransformers and other apparatus;
Hence, the processes intend to manufacture a new commodity in which soya bean would be prime ingredient, i.e. the impugned product is not soya bean oil per se; On the other hand, product fits very well within the description “inedible preparations of vegetable oils” under Entry 27 and there is no specific description which covers “Fire Resistant Natural Ester Dielectric Coolant for transformers and related electrical apparatus” : Maharashtra AAR
Citation: [TS-176-AAR-2018-NT]