Spent bleaching earth classification as activated mineral product under HSN 3802, attracts 18% GST rate.

Classification must follow the nature and condition of goods at supply under the General Rules for Interpretation: spent bleaching earth, though derived from edible oil refining and retaining mineral character, has been activated and used as an exhausted adsorbent, so it cannot be treated as raw non activated earth; accordingly it is classifiable as an activated natural mineral product under HSN 3802 90 19, not HSN 2508. Operative tax effect: goods so classifiable attract GST at 18% (9% CGST + 9% SGST) as per Notification No.09/2017 Central Tax (Rate).

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Issues: (i) Determination of the correct HSN code and applicable CGST & SGST rate on 'spent bleaching earth' arising from edible oil refining.

Analysis: The issue requires classification of the good as it exists at the time of supply by applying tariff interpretation rules and schedule entries. The First Schedule to the Customs Tariff Act, 1975 and the General Rules for Interpretation govern tariff classification. Chapter 25 (HSN 2508) covers raw or processed clays and earths primarily used as clays (e.g., bentonite, fullers earth) and does not contemplate activated mineral products or exhausted adsorbents. Chapter 38 (HSN 3802) expressly covers activated carbon and activated natural mineral products, including spent forms. The factual record (samples, MSDS, laboratory report) shows the material is mineral-based, chemically/thermally activated in use as an adsorbent and supplied in an exhausted/spent condition with residual oil and loss of adsorption capacity. Notification entries for HSN 3802 specify a GST rate consistent with the schedule applicable to activated natural mineral products.

Conclusion: HSN 3802 90 19; liable to GST at 18% (9% CGST + 9% SGST); decision is in favour of Revenue.

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