Goods and Services Tax Appellate Tribunal rules that slaked lime falls under the five percent tax bracket

The Goods and Services Tax Appellate Tribunal (GSTAT) ruled that chuna mixed with water, calcium carbonate, and glycerin remains classified as slaked lime under Harmonized System of Nomenclature (HSN) code 2522 when these additions do not alter its essential character. The tribunal rejected the revenue department's classification of the item as a food preparation, confirming that it attracts a Goods and Services Tax (GST) rate of 5% instead of 18%.

Tax classification disputes frequently arise when basic industrial or chemical products contain minor additives that the tax department attempts to categorize under higher-tariff headings. The legal principle dictates that if an additive does not transform the fundamental utility or identity of the core commodity, the original classification holds, protecting businesses from arbitrary high-rate demands. Tax professionals and businesses dealing in lime products should review their past filings, current billing structures, and input classifications to ensure they apply the correct 5% rate.

Legal consultants must keep track of tribunal rulings to defend clients against erroneous revenue notices and secure appropriate refunds where higher taxes were previously paid. Bottom line: Correct tariff classification protects your business from excess tax liabilities and costly litigation.