GST Rate for Papad Khar: Gujarat Authority for Advance Ruling Decision
The Gujarat Authority for Advance Ruling confirmed that Papad Khar is classified under HSN 2836 and is taxable at 18% GST.
- Ruling
- GUJ/GAAR/R/2026/30 dated 04/08/2026
- Dated
- 04 Aug 2026
- 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
- Papad Khar is classified under HSN 28362090, not as a food item.
- The product is subject to 18% GST, not the lower 5% rate.
- Inputs for exempt goods do not automatically qualify for tax exemptions.
In short
The company asked the Gujarat Authority for Advance Ruling (GAAR) to classify 'Papad Khar'—a traditional ingredient used to make papads—as a food item to benefit from a lower 5% GST rate or an exemption. The authority examined its chemical makeup, which consists of sodium carbonate and sodium bicarbonate, and determined it is an inorganic chemical rather than a food additive or common salt.
What has changed
How it worked before
Businesses were uncertain about whether this traditional ingredient should be taxed as a food product or as a chemical compound, leading to inconsistent tax treatment.
What has changed
The authority ruled that Papad Khar must be taxed at 18% under HSN 2836. This clarifies that the tax rate is based on the product's chemical composition, not its end use in food preparation.
Who this affects
Manufacturers and suppliers of Papad Khar or similar chemical-based food processing ingredients.
An example
A manufacturer in Maharashtra produces a similar alkaline mixture for papad making and has been charging 5% GST. After reading this ruling, they realize their product is chemically identical to the one in the Gujarat case. They should consult with a tax professional to assess their risk of a tax demand and consider updating their GST filings to the 18% rate to avoid future penalties.
What you should do
If you sell Papad Khar, you should review your current tax classification to ensure it aligns with this 18% rate. Remember that an Advance Ruling is only legally binding for the company that requested it and its specific tax officer; it does not automatically change the law for your business, though it signals how authorities view this product.
If you do nothing
If you continue to apply a lower tax rate than the authority deems correct, you risk receiving a tax demand notice for the unpaid difference plus interest and penalties. A tax officer is not required to follow this specific ruling, but they will likely use the same logic to challenge your classification during an audit.
The terms explained
- HSN Code
- A standardized system of numbers used to classify goods for taxation purposes.
- Inorganic chemicals
- Chemical substances that do not contain carbon-hydrogen bonds, often used in industrial processes.
- Advance Ruling
- A formal decision provided by tax authorities to a business regarding the tax treatment of a specific transaction.
The ruling in detail
Authority for Advance Ruling
M/s. Sardar Chemical Industries
GUJ/GAAR/R/2026/30 dated 04/08/2026 · Gujarat
Questions before the authority
- Whether Papad Khar should be classified under HSN Code 2501 (Common Salts) @ 5% GST based on its alkaline salt composition and food application; OR
- Whether Papad Khar should be classified under HSN Code 2102 (Prepared Food Additives/Condiments) @ 5% GST based on its nature as a food processing ingredient; OR
- Whether Papad Khar qualifies for GST exemption under: Notification No. 2/2017-Central Tax (Rate), Entry 96 (Papad and related food items); OR Entry 23 (Unpacked food items and basic food ingredients); OR Any other applicable exemption notification;
- If the product is incorrectly classified under HSN 2836@ 18% GST, what is the correct classification and what relief/refund is available for past assessments?
Facts
The applicant manufactures and supplies Papad Khar, a traditional food ingredient used as a raising agent and alkalizing compound in the preparation of papad and similar food items. The product is a mixture of sodium chloride, sodium carbonate, and sodium bicarbonate. The applicant sought a ruling to reclassify the product from HSN 2836 (taxed at 18%) to either HSN 2501 or HSN 2102 (taxed at 5%) or to claim a GST exemption.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification under HSN 2501 @ 5% | No. Product is not common salt or rock salt. |
| Classification under HSN 2102 @ 5% | No. Product does not have the characteristics of yeast or baking powder. |
| GST Exemption eligibility | No. Papad Khar does not qualify for GST exemption. |
| Correct classification and past relief | HSN 28362090 @ 18% GST. Covered under Entry No. 35 of Schedule II of Notification No. 09/2025-Central Tax (Rate). |
The Authority ruled that Papad Khar is not classifiable under HSN 2501 or 2102, nor does it qualify for GST exemption. It confirmed that the product is correctly classified under HSN 28362090 and is liable to GST at the rate of 18%. The contention that raw materials should be exempt because the final product (papad) is exempt was rejected as illogical.
Reasoning
The Authority analyzed the chemical composition of Papad Khar, noting it is a mixture of sodium carbonate and sodium bicarbonate, which falls under **Chapter 28 (Inorganic chemicals)**. It concluded that the product does not meet the criteria for HSN 2501 (Common Salts) or HSN 2102 (Prepared Food Additives). The ruling emphasized that tax rates for inputs and final products are determined independently, rejecting the applicant's argument regarding the exemption of the final product. It relied on the **Customs Tariff Act, 1975** and **Notification No. 09/2025-Central Tax (Rate)** to determine the applicable rate.
Provisions relied on
- Section 97(2) of the CGST/GGST Act, 2017
- Notification No. 2/2017-Central Tax (Rate)
- Notification No. 09/2025-Central Tax (Rate)
- Notification No. 10/2025-Central Tax (Rate)
- Customs Tariff Act, 1975
For the practitioner
This ruling confirms that Papad Khar is **taxable at 18%** under HSN 28362090. It serves as a strong precedent against the argument that inputs for exempt goods should automatically be exempt. Practitioners should note that the Authority strictly interprets HSN classifications based on chemical composition rather than end-use or traditional culinary status.
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/6-sardar_chemical_industries_0001_compressed_compressed.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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