5% GST on Supply of Quick Lime and Hydrated Lime with Purity Less than 98% : AAR [Read Order]
The Ruling stated that Quick Lime and Hydrated Lime with purity below 98% fall under HSN 2522 as industrial lime, not high-purity chemical compounds under HSN 2825. Accordingly, GST at 5% applied instead of the higher 18% rate.
![5% GST on Supply of Quick Lime and Hydrated Lime with Purity Less than 98% : AAR [Read Order]](https://images.taxscan.in/h-upload/2025/12/09/2111178-5-gst-supply-quick-lime-hydrated-lime-purity-less-than-98-aar-taxscan.webp "5% GST on Supply of Quick Lime and Hydrated Lime with Purity Less than 98% : AAR [Read Order]")
The Authority for Advance Ruling (AAR), Tamil Nadu, clarified that Quick Lime and Hydrated Lime containing impurities and having a purity below 98% were classifiable under HSN 2522 as industrial lime and attract a Goods and Services Tax (GST) of 5%.
The Applicant, M/s. Kaycee Industrial Chemicals Private Limited, a company engaged in the business of manufacturing and supplying Quick Lime and Hydrated Lime, had sought advance ruling on the question of Whether the supply of Quick Lime and Hydrated Lime, with a purity of less than 98%, by the Applicant was taxable under GST, and if so, what was the correct classification and applicable GST rate for such supply?
The Applicant sourced high-purity limestone from Oman, which was then subjected to a burning process to produce Quick Lime. Subsequently, this Quick Lime is hydrated to produce Hydrated Lime. The Quick Lime supplied by the Applicant had a composition of approximately 90% Quick Lime (CaO), 8% Limestone (CaCO3), and 2% Silica. The Hydrated Lime supplied had a composition ranging from 85% to 95% Hydrated Lime [Ca(OH)2], 3% to 13% Limestone (CaCO3), and 2% Silica. It was pertinent to note that the purity of both products was less than 98%.
The Applicant was charging GST at the rate of 5% on the supply of these products but harboured a doubt regarding the correct applicable rate, specifically whether 18% GST might be applicable instead.
The Authorized Representative of the Applicant, was heard in person on 23.09.2025, and sought clarification on the GST rate for Hydrated Lime, noting they currently charge 5% for purity for less than 86% and 18% for purity then more than 86%. They presented two supply orders and invoices from the Kerala Water Authority and a copy of the Indian Standard Specification for Quicklime and Hydrated Lime.
Further, their Representative through their customer, Kerala Water Authority, requested clarification, citing a ruling by the Special Commissioner (ST), Rajasthan State GST, which stated that hydrated lime with purity up to 98% falls under Heading 2522 and attracts a total GST of 5%. The applicant was thus seeking an Advance Ruling to confirm the correct tax rate.
Following the hearing, the applicant agreed to provide a written description of the manufacturing process and composition of Quick Lime and Hydrated Lime, which was later submitted on 27.09.2025.
The Applicant stated that their products, Quick Lime and Hydrated Lime, due to their specific composition and industrial application, should fall under a lower tax bracket, specifically 5% GST.
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The Authority of Advance Ruling consisted of Additional Commissioner/ Member (CGST), C. Thiyagarajan and Joint Commissioner/Member (SGST), B. Suseel Kumar, heard and reviewed the AAR.
Upon a detailed analysis of the product specifications, particularly the stated purity levels and the presence of impurities such as Limestone (CaCO3) and Silica, it was evident that the Quick Lime and Hydrated Lime supplied by the Applicant were not products of high chemical purity.
Further, The Authority observed that Chapter 25 of the Customs Tariff Act, 1975, pertains to "Salt; sulphur; earths and stone; plastering materials, lime and cement." Specifically, Heading 2522 covered "Quicklime, slaked lime and hydraulic lime, other than calcium oxide and hydroxide of heading 2825." This heading precisely described the nature of the products manufactured and supplied by the Applicant.
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On the other hand, Heading 2825 of the Customs Tariff Act, 1975, covered "Hydrazine and hydroxylamine and their inorganic salts; other inorganic bases; other metal oxides, hydroxides and peroxides." The Authority found that products falling under Heading 2825 typically contain no impurities and were considered high-purity chemical compounds. Given the impurity levels in the Applicant's products, classification under Heading 2825 was clearly inappropriate.
Thus, the supply of Quick Lime and Hydrated Lime, with a purity of less than 98%, by the applicant under Heading 2522 of the Customs Tariff Act, 1975 was taxable at the rate of 5% (comprising 2.5% Central Goods and Services Tax and 2.5% State Goods and Services Tax).
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