Chemical classification for sales tax remains unchanged by raw-material use, so the 8% rate applied.

Sodium bicarbonate and magnesium sulphate retained their character as chemicals for entry-based sales tax purposes even when used as raw materials. G.O.Ms.No.189, issued under the Andhra Pradesh General Sales Tax Act, prescribed 8% tax on all chemicals not covered by the Sixth Schedule, and the goods were not specifically excluded by the relevant entry. The fact of purchase or use as raw materials did not alter their essential classification. Accordingly, tax at 8% applied and revisional orders levying 12% could not be sustained.

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Issues: Whether Sodium Bicarbonate and Magnesium Sulphate, when used as raw materials, continued to fall within the category of "all chemicals" for the purpose of taxation at 8% under G.O.Ms.No.189 dated 07.02.2005.

Analysis: G.O.Ms.No.189 was issued under Section 9(1) of the Andhra Pradesh General Sales Tax Act, 1957 and prescribed 8% tax on all chemicals not covered by the relevant entry in the Sixth Schedule. The goods in question were not specifically enumerated in the excluded entry. The earlier Division Bench view relied upon by the Court had held that a chemical not enumerated in the relevant entry would be covered by the notification. The mere fact that the goods were purchased or used as raw materials did not change their essential character as chemicals.

Conclusion: The goods were taxable only at 8%, and the revisional orders imposing tax at 12% could not be sustained.

Ratio Decidendi: A chemical retains its classification as a chemical for entry-based tax purposes notwithstanding its use as a raw material, unless it is specifically excluded by the applicable taxing entry or notification.

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