The Maharashtra Authority for Advance Rulings (AAR) has come to the conclusion that they will not determine the different classification (HSN) of tyre pyrolysis oil and the tax rate which is applicable with it. The AAR has come to this decision due to the non-submission of complete details of the product.
The order was passed in an application filed by Royal Carbon Black Pvt.Ltd. a company which functions on tyre recycling.
The application was considered under Sec.97 of the Central Goods and Services Act and Maharashtra Goods and Services Act, for adjudicating upon the classification (HSN) of Tyre Pyrolysis oil and the tax rate applicable to it.
According to the aforementioned entity, the tyre recycling process produces the renewable rubber component which alone is converted into pyrolysis oil that can be used to create liquid fuel.
It has come to the understanding of AAR that in the absence of specific schedule entry prescribed for the impugned oil under CGST, the applicant had approached the Maharashtra Authority to pursue an advanced hearing trying to classify pyrolysis oil as biodiesel under HSN 3826 since the product is derived from the rubber part of tyres that is renewable in nature or to classify the same product as a marine fuel under the HSN 2710.
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However, the Jurisdictional Officer brought to the notice of the Maharashtra authority that Pyrolysis oil is being used as industrial fuel to substitute industrial diesel and furnace oil. He stated that it is made from inorganic substances and that it does not contain and is not made of any vegetable oil or animal fat. He further added that the production process of Pyrolysis oil does not involve any kind of distillation of any petroleum product and hence, the same cannot be classified as biodiesel or Marine fuel.
The Maharashtra Authority declined the advanced hearing since the applicant did not produce test reports or any relevant data which shows that the composition of the oil upon recycling rubber tyres has other materials which are up to the specifications that are required for it to be classified as biodiesel or marine fuel.
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