AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2024 (10) TMI 1418
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The issue raised by M/s. BALVEER SINGH, Shop No B/NS/24, 327, Maruka ki PoI, Khakharki„ NAGUAR-341510, RAJASTHAN (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97 (2) (a) given as under: (a) classification of goods and/or services or both (e) determination of the liability to pay tax on any goods or services or both A. SUBMISSION OF THE APPLICANT (in brief):- 1. That M/S Balveer Singh, situated at 327, Maruka Ki PoI, Khakharki, Nagaur, Rajasthan 341510 (hereinafter referred to as "applicant") is presently an unregistered person intending to start the business of manufacture and sale of hydrated lime (also known as slaked lime). 2. That a picture of the proposed slaked / hydrated lime is produced for your reference below: 3. That the slaked / hydrated lime is used as raw material in various industries including but not limited to steel industry, paper industry, chemical industry, leather industry, sugar industry, dairy industry, water treatment, road construction, etc. 4. That the process of manufacturing of proposed slaked / hy....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CHEDULE III - 9% S.No. Chapter/Heading/Subheading/Tariff item Description of Goods 39. 28 All inorganic chemicals [other than those specified in the Schedule for exempted goods or other Rate Schedules for goods [including Fertilizer grade Phosphoric acid]] 9. That this Advance Ruling is sought from the Authority for Advance Ruling in respect of the following question a. 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? b. What shall be the rate of tax on the said product? B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) On Classification 1. That the charging section for GST i.e. Section 9 of the Central Goods and Services Tax Act 2017 provides that there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the reco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riff item Description of Goods 39. 28 All inorganic chemicals [other than those specified in the Schedule for exempted goods or other Rate Schedules for goods [including Fertilizer grade Phosphoric acid]] 7. That it is understood that specific description shall always prevail over the general description when it comes to classification of goods. However, the guiding principles determining the classification of a product under the GST regime can be broadly bifurcated as under: a. Classification under the Customs Tariff Act, 1975 ("Customs Tariff Act") along with relevant Chapter Notes pertaining to Chapters 25 and 28; b. General Rules for Interpretation of the First Schedule to the Customs Tariff Act (hereinafter referred to as the "General Rules for Interpretation"); c. HSN Explanatory Notes released by the World Customs Organization 8. In this regard, it is pertinent to understand the classification of such goods under the Customs Tariff Act 1975.The screenshot of the relevant extract is produced below: Chapter 25 2522 QUICKLIME, SLAKED LIME AND HYDRAULIC LIME, OTHER THAN CALCIUM OXIDE AND HYDROXIDE OF HEADING 2825....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icle falls within a specific entry such goods must necessarily be excluded from the general entry" 13. That in given case, the heading i.e. 2522 is clear and more specific and hence should be given over the necessary preference. 14. That further, reference is also made to the HSN explanatory notes provided by the World Customs Organization. The Explanatory Notes as approved by the WCO Council, constitute the official interpretation of the Harmonized System at the international level and are an indispensable complement to the System. HSN explanatory notes are a good guide for determining as to how a particular HSN heading is understood in trade and commerce parlance across world. 15. That the HSN Explanatory Notes, while not legally binding, they do represent the considered views of classification experts of the Harmonized System Committee. It is well settled that the explanatory notes have persuasive value and in the event of disputes, the Indian Courts have upheld seeking recourse to the explanatory notes while determining classification of products. 16. Reliance in this regard is placed on the following judicial precedents: a. Hon'ble Supreme Court in L.M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ral cement in it still contains appreciable amounts of uncombined which may be slaked with water. The heading excludes purified calcium oxide md calcium hydroxide (heading 28.25) 28.25 - Hydrazine and hydroxylamine and their inorgante salts; other inorganic bases; metal oxides, hydroxides and peroxides. 2825.10 - Hydrazine and hydroxylamine and their inorganic salts 2825.20 - Lithium oxide and hydroxide 2825.30 - Vanadium oxides and hydroxides 2825.40 - Nickel oxides and hydroxides 2825.50 - Copper oxides and hydroxides 2825.60 - Germanium oxides and zirconium dioxide 2825.70 -Molybdenum oxides and hydroxides 2825.80 - Antimony oxides 2825.90 -Other This heading covers : (A) Hydrazine and hydroxylamine and their inorganic salts. (B) The metal oxides, hydroxides and peroxides of this Chapter not included in preceding headings. (11) Calcium oxide hydroxide and peroxide. This heading covers only the oxide (CaO) and the hydroxide in the pure state (i.e., containing practically no clay, iron oxide, manganese oxide, etc.), such as the product obtained by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as produced supra; b. Explanatory notes to Chapter 28.25 specifically excludes quicklime and slaked lime; c. The goods in question does not contain 98% of the calcium oxide as well as calcium hydroxide and therefore are not fit for classification under chapter 28.25. 23. That in the case of COMMISSIONER OF C. EX., HYDERABAD-I" vs. BHADRADRI MINERALS PVT. LTD., reported in 2015 (324) E.L.T. 395 (Tri. - Bang.), it was held that Burnt lime - Classification - Whether classifiable as Calcium Oxide under sub-heading 2505.00 of Central Excise Tariff exempt from payment of duty or under Heading 28.25 ibid chargeable to duty - HELD : Chapter Note 2 of Chapter 25 ibid detailing processes covered by it preceded by words 'except where context otherwise requires' - On this basis C.B.E. & C. Circular No. 112/6/91-CX.3, dated 10-7-1991 clarified that burnt lime merits classification under sub-heading 2505.60 ibid notwithstanding the fact that burnt lime obtained by process of calcinations and not through grinding, sifting; etc. HSN Explanatory Note under Heading 28.25 ibid excludes Calcium Oxide with purity less than 98% whereas purity of burnt lime is 70 to 75% and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s quick lime containing less than 98% calcium oxide and slaked lime containing less than 98% calcium hydroxide fall under heading 2522. Therefore, in order to remove ambiguity in the matter it is hereby clarified that quick lime and slaked/ hydrated lime having purity less than 98% would fall under heading 2522 and resultantly taxable @ 5%." APPLICANT'S UNDERSTANDING 27. Therefore, in view of the above submissions the applicant is of the understanding that 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%. C. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT: Q.1 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? Q2. What shall be the rate of tax on the said product? D. PERSONAL HEARING In the matter, personal hearing was granted to the applicant on 09.04.2024 & 28.05.2024. Mr. Yash Dhadda C.A. and Suchi Sethi C.A. Authorized Representative appeared for personal hearing. They reiterated the su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2522 of Customs Tariff covers Quicklime, Slacked Lime and Hydraulic Lime, Other Than Calcium Oxide and Hydroxide of Heading 2825 and CTH 2522 10 00 covers Quicklime and CTH 2522 20 00 covers slacked lime. General Notes to HSN Explanatory Notes to Chapter 25 states: Quicklime (an impure calcium oxide) is obtained by calcining limestone containing very little or no clay. It combines very rapidly with water, giving off considerable heat and producing slacked lime (calcium hydroxide). Slacked lime is usually employed for soil improvement or in the sugar industry. Hydraulic lime is obtained by low temperature calcination of limestone containing sufficient clay (although usually less than 20%) to ensure that the product sets under water. Hydraulic lime differs from natural cement in that it still contains appreciable amounts of uncombined quicklime, which may be slacked with water. The heading excludes purified calcium oxide and calcium hydroxide (heading 28.25). From the above, it is seen that Quicklime is obtained by calcination of limestone i.e. calcium carbonate giving calcium oxide and carbon dioxide and when it is further combined with water, ....