2024 (10) TMI 1418 - AAR - GST

Rate of GST for hydrated lime/slaked lime - Advance Ruling - classification and HSN Code for supply of slaked / hydrated lime manufactured by the applicant containing less than 98% of the Calcium Oxide and Calcium Hydroxide - determination of the liability to pay tax on any goods or services or both - What should be the classification and HSN Code for supply of slaked / hydrated lime manufactured by the applicant containing less than 98% of the Calcium Oxide and Calcium Hydroxide? Classification and HSN Code - HELD THAT - The All India Lime Manufacturers Association (AILMA) which is apex body for lime manufacturers and suppliers in India having registration number 63735 and CIN IJ91900RJ2019NPL063735 located at Jodhpur sought clarification from Honorable Commissioner (GST) of both center (CGST) and Rajasthan state (SGST) in which the department vide clarification letter dated 06.03.2020 16.02.2022 has clarified that Hydrated lime/Slaked Lime and Quick Lime with purity less than 98% falls under HSN heading 2522. Thus the goods in question fall under the HSN 2522 and accordingly the rate of tax applicable on the same in accordance with rate notification no. 1/2017-Central Tax (Rate) shall be 5%. Classification and HSN Code for supply of slaked / hydrated lime manufactured by the applicant containing less than 98% of the Calcium Oxide and Calcium Hydroxide - The laboratory analysis reports furnished by the applicant reveals that the calcium hydroxide/oxide composition in the said goods are less than 98% and impurities are also available in such goods. Applying the above to the case at hand we find that the goods to be supplied is slaked lime and hydrated lime of purity less than approximately 98% merit classifiable under CTH 2522 20 00. We hold that slaked/hydrated lime manufactured by the applicant containing less than approximately 98% of the calcium oxide and calcium hydroxide are classifiable under CTH 2522 20 00 taxable at 2.5% CGST and 2.5% SGST as per entry Sl. No. 131 of Schedule I of Notification No. 1/2017-C.T. (Rate) dated 28-6-2017 as amended. RULING Q. 1 What should be the classification and HSN Code for supply of slaked lime manufactured by the applicant containing less than 98% of the Calcium Oxide and Calcium Hydroxide? Ans-1 The classification and HSN for supply of slaked lime manufactured by the applicant containing less than approximately 98% of the calcium oxide/hydroxide is classifiable under CTH 2522 20 00. Q2. What shall be the rate of tax on the said product? Ans-2 The rate of tax of the subject goods is at 2.5% CGST and 2.5% SGST as per entry S.No. 131 of Schedule I of Notification No. 1/2017-C.T. (Rate) dated 28-6-2017 as amended.

Summary

Issues Involved:
1. Classification of slaked/hydrated lime containing less than 98% of calcium oxide and calcium hydroxide.
2. Applicable rate of tax under GST for the said product.

Issue-wise Detailed Analysis:

1. Classification of Slaked/Hydrated Lime:
The primary issue is the classification of slaked/hydrated lime manufactured by the applicant with calcium oxide and calcium hydroxide content less than 98%. The applicant seeks to determine the appropriate Harmonized System of Nomenclature (HSN) code for the product under the GST regime.

The applicant argues that the product should be classified under Chapter 2522 of the Customs Tariff, which covers "Quicklime, slaked lime and hydraulic lime, other than calcium oxide and hydroxide of heading 2825." This classification is based on the HSN Explanatory Notes, which specify that Chapter 2825 covers calcium oxide and hydroxide only in their pure states (approximately 98% purity). Since the applicant's product contains impurities and does not meet the 98% purity threshold, it is not covered under Chapter 2825.

The applicant supports this classification with judicial precedents, including the cases of "Commissioner of C. Ex., Hyderabad-I vs. BhadraDri Minerals Pvt. Ltd." and "M/s. Jindal Stainless (Hisar) Ltd vs. The Commissioner of Customs," which held that products with less than 98% purity fall under Chapter 25. Additionally, the applicant refers to clarifications issued by the Rajasthan State Tax department and the Office of the Assistant Commissioner, Division-C, Jodhpur CGST, which align with this interpretation.

The Authority for Advance Ruling (AAR) concurs with the applicant's interpretation, noting that the laboratory analysis reports confirm the presence of impurities and a calcium hydroxide content of less than 98%. Therefore, the AAR concludes that the product is classifiable under CTH 2522 20 00.

2. Applicable Rate of Tax:
The second issue concerns the applicable GST rate for the classified product. The applicant contends that the rate of tax should be 5% (2.5% CGST and 2.5% SGST) as per entry Sl. No. 131 of Schedule I of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017.

The AAR agrees with this assessment, noting that the classified product falls under the specified entry, which prescribes a tax rate of 5%. The AAR's ruling is consistent with the applicant's understanding and aligns with the GST notification's provisions.

Ruling:
1. Classification and HSN Code: The slaked/hydrated lime manufactured by the applicant, containing less than approximately 98% of calcium oxide/hydroxide, is classifiable under CTH 2522 20 00.
2. Rate of Tax: The applicable rate of tax for the product is 2.5% CGST and 2.5% SGST, totaling 5%, as per entry Sl. No. 131 of Schedule I of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017.