[AJ-got-BHP]

Originally Posted by Thad E Ginathom

Or... Mineral, synthetic: is there actually any good reason for different tax rates?

Coming back to the topic and to your question, most of the Fully Synthetic Oils are imported. If made/ blended in India, the Base Oil is imported.

Mineral oils are taxed at 18% to standy by the slogan of MAKE IN INDIA whereas Synthetic Oils are taxed @ 28% since either the finished product or the core raw material is imported from overseas countries.

Not getting into any political aspect of things now

[Thad E Ginathom]

Thanks. I'm happy to know the reason, and have no wish to raise the politics

[SunnyBoi]

Me and few other friends ordered Motil 8100 XCess full synth oil from Amazon. Seller is Cloudtail, which again is amazon.

While looking at the invoice, one of my friends pointed out the HSN code was 2710 and the GST charged was 18%.

I know for a fact that this oil is fully synthetic, Its made in France and imported whole. Does this mean amazon has goofed up?

Full credit to Varun for finding this out.

[SunnyBoi]

Okay, the more I read about this the more I feel AJ-got-BHP might be mistaken.

Originally Posted by AJ-got-BHP

However, the applicable GST Rate for Fully Synthetic Oils is 28% having an HSN Code of 3403. Fully Synthetic Oils are oils which have a minimum 70% or more content of Synthetic Base Oil in it's composition. Most Fully Synthetic Products are not manufactured in India and are rather Imported from overseas.

I had a look of the descriptions of various HSNs. My reference document is : http://wbcomtax.nic.in/GST/GST_FAQ/GST_HSN_CODES.pdf

Lets look what are the classifications for HSN 2710

Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils.

So this means 2710 is applicable for 70% or more of mineral - Mineral oils and Semi synthetic oils with 30% or less synthetic content?

Back to 3403



This classification looks like it caters to the likes of WD40, Zorrik, etc rather than Engine oils. Even this has the 70% or more of petroleum oils or of oils obtained from bituminous minerals clause and I wonder how does this equate to full synthetic oils?

I have raised a concern with Amazon and they have escalated it to their GST department. I'll update the thread when I get a reply from them.

[AJ-got-BHP]

Originally Posted by SunnyBoi

Okay, the more I read about this the more I feel AJ-got-BHP might be mistaken.



I had a look of the descriptions of various HSNs. My reference document is : http://wbcomtax.nic.in/GST/GST_FAQ/GST_HSN_CODES.pdf

Lets look what are the classifications for HSN 2710

Attachment 1691687



So this means 2710 is applicable for 70% or more of mineral - Mineral oils and Semi synthetic oils with 30% or less synthetic content?

Back to 3403

Attachment 1691688

This classification looks like it caters to the likes of WD40, Zorrik, etc rather than Engine oils. Even this has the 70% or more of petroleum oils or of oils obtained from bituminous minerals clause and I wonder how does this equate to full synthetic oils?

I have raised a concern with Amazon and they have escalated it to their GST department. I'll update the thread when I get a reply from them.

Mistaken ? Not Really !

Have some Invoices from Manufacturers and their assigns to share, but cannot due to certain privacy reasons.

Please carry on with your research and I shall be happy to know what reseller 'Amazon has to say'.

[SunnyBoi]

Originally Posted by AJ-got-BHP

Mistaken ? Not Really !

OKay, can you clarify on the below points?

How did you come to a conclusion that oils with synthetic content of 70% comes within HSN 2710? As per the description and my understanding, the number is 30% not 70%.

How do you know HSN 3403 is for Fully Synthetic oils? Again the description for HSN 3403 does not indicate in any way that its meant to cater for Fully Synthetic Oils.

I had a look at the SDS for 8100 X-Cess, technically 100% of the oil is petroleum derived, although it has been cracked and refined.



So I'm not sure how your logic even applies here.

It would be really helpful if you provide these clarifications.

FWIW, I couldn't care less if Amazon charged 18 or 28% GST under HSN 2710 or 3403, I'm not convinced that looking at HSN codes or GST to know whether an oil is Fully Synthetic or not is wise.

[hangover]

Post Deleted by the Team-BHP Support : Do NOT post misleading information or rubbish on the forum. Keep your posts factually correct.

[AJ-got-BHP]

Originally Posted by SunnyBoi

Me and few other friends ordered Motil 8100 XCess full synth oil from Amazon. Seller is Cloudtail, which again is amazon.

While looking at the invoice, one of my friends pointed out the HSN code was 2710 and the GST charged was 18%.

I know for a fact that this oil is fully synthetic, Its made in France and imported whole. Does this mean amazon has goofed up?

Full credit to Varun for finding this out.

Attachment 1691683

Thanks SunnyBoi for sharing the Invoice Copy. I have taken up the matter with the concerned authorities at Amazon and with the Manufacturer/ Importer. I am awaiting their feedback on the said matter and shall revert back once I get an update from them

[donzerus]

Originally Posted by AJ-got-BHP

However, the applicable GST Rate for Fully Synthetic Oils is 28% having an HSN Code of 3403. Fully Synthetic Oils are oils which have a minimum 70% or more content of Synthetic Base Oil in it's composition. Most Fully Synthetic Products are not manufactured in India and are rather Imported from overseas.

Thanks for posting this very useful information. I've been using Mobil1 0W-40 for my Punto MJD for many years and have always wondered if the oil blend we get here in India is fully synthetic or not as I've read that Mobil sells different blends of Mobil1 0W-40 in different countries.

Recently, I purchased Mobil1 0W-40 from an authorized distributor with invoice and looked it up now to find out that HSN code of Mobil1 0W-40 is 3403 and GST charged is 28% and happy to know that the one sold in India is fully synthetic

[SunnyBoi]

The GST for HSN 3403 has been dropped to 18% from 28% this week so I'm sure this HSN goofup will no longer be done to save taxes.

Originally Posted by AJ-got-BHP

Thanks SunnyBoi for sharing the Invoice Copy. I have taken up the matter with the concerned authorities at Amazon and with the Manufacturer/ Importer. I am awaiting their feedback on the said matter and shall revert back once I get an update from them

Originally Posted by SunnyBoi

OKay, can you clarify on the below points?

How did you come to a conclusion that oils with synthetic content of 70% comes within HSN 2710? As per the description and my understanding, the number is 30% not 70%.

How do you know HSN 3403 is for Fully Synthetic oils? Again the description for HSN 3403 does not indicate in any way that its meant to cater for Fully Synthetic Oils.

I had a look at the SDS for 8100 X-Cess, technically 100% of the oil is petroleum derived, although it has been cracked and refined.

So I'm not sure how your logic even applies here.

It would be really helpful if you provide these clarifications.

...still waiting for answers from yours truly.

[Sahil]

Just bought Shell fully synthetic oil for around 3000rs for 4 liters. Link:https://www.amazon.in/gp/product/B00...7S&qty=2&psc=1
After GST(18%) back it will cost approx 600 bucks a liter!

[Czarcarsm]

Originally Posted by AJ-got-BHP

The hot topic of discussion during this festive season is the effect of GST on various trades and practices and collaterally it's effect on a common man and the end consumer.

The existing GST rate of 18% is applicable to all Mineral Oils and Part Synthetic Oils only which have a HSN Code of 2710.


However, the applicable GST Rate for Fully Synthetic Oils is 28% having an HSN Code of 3403.

All these years numerous companies have claimed their Oils to be the best performer and in the name of Synthetic and have extorted a quick buck from the consumer by not providing the correct product at the correct prices. Some have resorted to giving cut throat pricing to competitors by claiming their product to be Fully Synthetic in order to gain more market share and market presence and showcasing the fact that Synthetics come cheap. T 'Jaago Graahak Jaago' and know the applicable GST rate of the Oil that you are buying from any source before actually buying the oil in order to actually know whether it falls under the Synthetic Category or not.

Originally Posted by SunnyBoi

Okay, the more I read about this the more I feel AJ-got-BHP might be mistaken.

I tend to agree with SunnyBoi. I think this thread is misleading. There are couple of reasons for this

Reason #1: Rather loose usage of the term “Synthetic Oil”. I would suggest this be edited to differentiate between Group 4 and Group 3 Synthetics, to be exact and clear. Group 3 Synthetic Oil is still under HSN 2710. For example Shell Ultra Helix, made from Natural Gas with HSN 2710. This is a true synthetic, it is made from a non oil base (Natural Gas) and is chemically combined to make a lubricating oil having molecules of very similar size. Hence synthetically made oil and with the benefits of Synthetic Oil. Please not that this is NOT one of those so call synthetics made by Hydrogenating mineral oils nor made from the more advanced PAO base.
The summary is that Group 3 true synthetics have HSN 2710.

Reason #2: Selling Synthetic under HSN 2710 does not mean customer is being cheated. The way HSN 2710 is described makes, both mineral and Group 3 synthetic oil to be group under the same HSN. Also, the thread somehow gives the impression (may not by intent) that Synthetic under HSN 3403 is the sign of best oil for engine. This is not really true. The Mobile 1 with HSN 3403 (Group 4) has certain levels of Natural Gas derived synthetic base oil in it along with PAO.

Hence I request, either this forum thread be deleted entirely due to incorret information or allow the 1st posting to be edited.
An edited post should contain the following..

• HSN 2710 - Includes both mineral and Group 3 Synthetic Oils. Example Shell Helix Ultra
• HSN 3403 - Group 4 (mostly PAO based) Synthetic Oils. Example Mobile 1 Extended Performance
• Having HSN 2710 full synthetic does not mean the Lube Manufacturer is cheating the customer. You have to look at how the synthetic base oil was manufactured from. Is it from Hydro-craking mineral oil or made ground up from natural gas.

I would like thank user AJ-got-BHP for starting this important thread, without which I would not have been able to dig deeper into the HSN codes. It is just that it needs an edit.

[SunnyBoi]

Originally Posted by Czarcarsm

Hence I request, either this forum thread be deleted entirely due to incorrect information or allow the 1st posting to be edited.
An edited post should contain the following..

• HSN 2710 - Includes both mineral and Group 3 Synthetic Oils. Example Shell Helix Ultra
• HSN 3403 - Group 4 (mostly PAO based) Synthetic Oils. Example Mobile 1 Extended Performance
• Having HSN 2710 full synthetic does not mean the Lube Manufacturer is cheating the customer. You have to look at how the synthetic base oil was manufactured from. Is it from Hydro-craking mineral oil or made ground up from natural gas.

You are again falling into the assumption fallacy, where has it been documented that HSN 2710 is for Minerals and Group 4, 3403 is for Group 4 and above? If its your understanding, again it tends to be just your opinion and may not the actual fact just like the whole premise of this thread.

The example I used, Motul 8100 X-Cess has Group 5 base oils.

I haven't heard back from Amazon and I don't feel like following up either. I have asked the OP few times in my replies and he's not bothered to reply or clarify.

The only time one will know the HSN of the oil they've been charged is only after purchasing or already pouring in the oil, at which time there is nothing that the buyer can do anyway. The whole premise of the thread, using HSN to identifying the type of oil is just wrong.

[Czarcarsm]

Originally Posted by SunnyBoi

You are again falling into the assumption fallacy, where has it been documented that HSN 2710 is for Minerals and Group 4, 3403 is for Group 4 and above? If its your understanding, again it tends to be just your opinion and may not the actual fact just like the whole premise of this thread.

I assume you meant HSN 2710 for Minerals and Group 3. There is a typo.

Here is a detailed explanation. I didn't want to write all these earlier.

HSN 3403 has 2 key points,

1. It is for lubricating preparations, along with anti rust, anti-corrosion etc. The keyword ‘including’ does not mean ‘only’.
2. It excludes lubricants with more than 70% of petroleum oils. Exceptions allowed for textile, leather.

Detailed explanation
Anti-rust, Anti-corrosion etc are additional items, and NOT the only items permitted in HSN 3403. Please note Mobil 1 has significant PAO base. The PAO base in not derived directly from petroleum oil. It is made from a chemical reaction of methane, CO, CO2 etc. But these days it is made from Ethylene and Propylene gases. Agree that these two gases are 'manufactured' mainly from petroleum, but then it is not a directly mined product like Natural Gas, Propane, Crude oil etc. Hence POA oils do not come under oil derived or “obtained from petroleum or bituminous oil”. Hence falls under HSN 3403.
Additionally see link below showing import information of Mobile 1

https://www.zauba.com/import-1+SYNTH...3-hs-code.html

toward the bottom the HSN code for Mobil 1 is given as 3403.



Here is another link
http://www.indiatradedata.com/import.../unit-ltr.html



Both show import data of Mobile 1 Synthetic oil and has HSN 3403.
Also user donzerus has shown the bill for Mobil 1 with HSN 3403.
Hope this clears the air on Mobil 1 or Group 4 Synthetics being HSN 3403

[aerohit]

For the original post:

So if true synthetic content is 71% even then it counts as 'Fully Synthetic'.

Thats why some oils are classified as '100% Synthetic', which means the obvious.