GST Rate for Quick Lime and Hydrated Lime Under 98% Purity
The Tamil Nadu Authority for Advance Ruling confirmed that lime products with significant impurities are taxed at 5% GST.
- Ruling
- Advance Ruling No. 48/ARA/2025, dated 17.11.2025
- Dated
- 17 Nov 2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The company asked if their lime products attract 5% or 18% GST.
- Products with 85% to 95% purity fall under HSN 2522.
- The Authority confirmed a 5% GST rate applies to these goods.
In short
The company asked the Tamil Nadu Authority for Advance Ruling (AAR) to clarify the Goods and Services Tax (GST) rate for their lime products. Because their Quick Lime and Hydrated Lime contain impurities like silica, they were unsure if they should charge 5% or 18% tax. The authority looked at whether these products are basic mineral goods or high-purity chemicals.
What has changed
How it worked before
Businesses were uncertain whether lime products with impurities should be taxed as basic mineral goods or as higher-taxed chemical compounds.
What has changed
The authority ruled that lime with 10% to 15% impurities belongs under HSN 2522, which carries a 5% GST rate. This means businesses producing lower-purity lime can continue applying the 5% rate instead of the higher 18% rate reserved for pure chemical compounds.
Who this affects
Manufacturers and suppliers of Quick Lime and Hydrated Lime with purity levels below 98%.
An example
A manufacturer in Maharashtra produces Hydrated Lime with 92% purity. They are worried their tax officer might demand 18% GST. Based on this ruling, they can argue their product is a mineral product under HSN 2522 rather than a pure chemical. They should document their purity levels to support this classification if questioned.
What you should do
If you sell similar lime products, you now have a reference point for your tax classification. However, an advance ruling only binds the company that asked and its specific tax office. You should consult with your own tax advisor to confirm if your specific product composition matches this ruling before changing your tax filing.
If you do nothing
If you apply the 5% rate without confirming your product qualifies, a tax officer may disagree and demand the 18% rate. You would then be liable for the tax difference, plus interest and potential penalties. Relying on a ruling that does not perfectly match your product's chemical profile is a significant financial risk.
The terms explained
- HSN
- Harmonized System of Nomenclature is a code used to classify goods for taxation purposes.
- Advance Ruling
- A formal decision by tax authorities on how GST applies to a specific business situation.
- Chapter 28
- A section of the tax code that covers high-purity chemical products, which often face higher tax rates.
The ruling in detail
Authority for Advance Ruling
M/s. Kaycee Industrial Chemicals Private Limited
Advance Ruling No. 48/ARA/2025, dated 17.11.2025 · Tamil Nadu
Questions before the authority
- We are collecting 5% GST on Quick Lime and Hydrated Lime having purity less than 98%. But there is lot of confusion regarding the GST rate whether GST rate is 5% or 18%.
- GST rate of Quick Lime and Hydrated Lime having less than 98% purity - AAR Ruling required.
Facts
The applicant manufactures Quick Lime and Hydrated Lime by burning imported limestone in a kiln and subsequently spraying the Quick Lime with water. The resulting products have a purity level ranging from 85% to 95%, with the remainder consisting of impurities like silica and calcium carbonate. The applicant sought clarification on the applicable GST rate for these products, specifically whether they fall under the 5% or 18% tax bracket.
Ruling
| Question | What the authority ruled |
|---|---|
| GST rate for Quick Lime and Hydrated Lime (<98% purity) | 5% (CGST - 2.5% and SGST - 2.5%) Applicable to products under heading 2522 |
The Authority ruled that the products supplied by the applicant fall under HSN 2522 and attract a total GST rate of 5%. This classification is based on the fact that the products contain significant impurities and are not pure chemical compounds as defined under Chapter 28.
Reasoning
The Authority determined that because the products contain 10% to 15% impurities, they do not qualify as separate chemically defined compounds under Chapter 28. Instead, they are classified under **Heading 2522** of the Customs Tariff Act, 1975, which covers quicklime, slaked lime, and hydraulic lime. The ruling relies on Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017, which specifies a **2.5% Central Tax rate** (total 5%) for goods under this heading. The Authority noted that this rate remained unchanged despite subsequent notifications.
Provisions relied on
- Section 9(1) of the CGST Act, 2017
- Section 97(2) of the CGST Act, 2017
- Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017
- Notification No. 9/2025 - Central Tax (Rate) dated 17.09.2025
- Chapter 25 of the Customs Tariff Act, 1975
- Chapter 28 of the Customs Tariff Act, 1975
For the practitioner
This ruling provides clarity for manufacturers of lime products with purity levels below 98%, confirming they are subject to a **5% GST rate** under HSN 2522. It distinguishes these products from high-purity chemical compounds that would otherwise fall under Chapter 28 and attract higher taxation. Practitioners should note that this ruling is specific to products containing significant impurities and does not apply to high-purity (98%+) lime products.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/4-ms-kayee_industrial.pdf
Legibility of the scan, as read: high.
Prepared 15-10-2026.
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