GST Rate for Industrial Grade Quick Lime and Slaked Lime
High-purity industrial lime is classified under Chapter 28 and taxed at 18% GST.
- Ruling
- ORDER No.25/AAR/2018 DATED:31.12.2018
- 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 for the GST rate on 86% pure industrial lime.
- The Authority ruled these products fall under Chapter 28.
- Industrial grade lime is subject to 18% GST.
- Building-grade lime remains under Chapter 25 with lower tax rates.
In short
The company asked the Authority for Advance Ruling (AAR) to clarify if their high-purity industrial lime should be taxed as a basic mineral or as a chemical compound. Because the lime has 86% purity, the authority decided it is a specific chemical product rather than a simple building material.
What has changed
How it worked before
Businesses often assumed all lime products fell under the lower tax brackets reserved for basic minerals used in construction.
What has changed
The authority confirmed that high-purity industrial lime is a chemically defined compound, moving it to the 18% GST bracket. This means businesses selling high-purity lime must now collect and pay 18% GST instead of the lower rates applied to construction-grade lime.
Who this affects
Manufacturers and suppliers of high-purity lime used in water treatment or chemical industries.
An example
A chemical supplier produces 88% pure Quick Lime for a local water treatment plant. They previously charged a lower GST rate, assuming it was a basic mineral. Based on this ruling, they should re-evaluate their classification and likely update their GST billing to 18% to avoid future tax disputes.
What you should do
If you sell high-purity lime, review your product specifications against this ruling. Remember that an advance ruling only binds the company that asked and its specific tax office; it is not a universal law for all businesses.
If you do nothing
If you apply the wrong tax rate, your local tax officer may issue a notice for short-payment of GST. You would then be liable for the unpaid tax, interest, and potential penalties. Relying on a ruling that does not apply to your specific product purity can lead to significant financial exposure.
The terms explained
- Chapter 28
- A section of the tax tariff that covers inorganic chemicals and related compounds.
- Chapter 25
- A section of the tax tariff that covers basic minerals, salt, and earth products used in construction.
- Chemically defined compound
- A substance with a specific chemical structure and high purity level, distinct from raw or crude minerals.
The ruling in detail
Authority for Advance Ruling
Palaniappan Chinnadurai [Prop: M/s.Tuticorin Lime and Chemical Industries]
ORDER No.25/AAR/2018 DATED:31.12.2018 · Tamil Nadu
Questions before the authority
- What is the applicable chapter and GST rate for Industrial Grade Quick Lime having 86% of Calcium Oxide content and Industrial Grade Slacked Lime having 86% of Calcium Hydroxide content?
Facts
The applicant manufactures industrial grade Quick Lime and Slaked Lime with a purity of 86% for supply to water treatment plants and chemical industries. They sought a ruling on the correct classification and GST rate for these high-purity products. The applicant previously relied on an older excise ruling to argue for classification under Chapter 28.
Ruling
| Question | What the authority ruled |
|---|---|
| Industrial Grade Quick Lime (86% purity) | CTH 28259090, 18% GST Taxable at 9% CGST and 9% SGST |
| Industrial Grade Slaked Lime (86% purity) | CTH 28259040, 18% GST Taxable at 9% CGST and 9% SGST |
The Authority ruled that the industrial grade Quick Lime and Slaked Lime with 86% purity are classifiable under Chapter 28. Specifically, they are taxable at 18% GST (9% CGST and 9% SGST).
Reasoning
The Authority distinguished between low-purity lime used for building purposes (Chapter 25) and high-purity industrial grade lime (Chapter 28). It reasoned that the applicant's products, being of 86% purity, are **separate chemically defined compounds** rather than crude mineral products. The decision relied on the HSN Explanatory Notes to Chapter 28 and the specific entry at Sl. No. 38 of Schedule III of Notification No. 01/2017-Central Tax (Rate).
Provisions relied on
- Section 98 of the CGST Act 2017
- Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017
- G.O. (Ms) No. 62 dated 29.06.2017
- Chapter 25 and Chapter 28 of the Customs Tariff Act
For the practitioner
This ruling clarifies that **high-purity industrial lime** is excluded from the lower-rated Chapter 25 and falls under the 18% GST bracket of Chapter 28. It provides a clear threshold for practitioners to distinguish between building-grade and industrial-grade lime based on purity levels. It does not apply to low-purity lime used for traditional building purposes like white-washing.
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/tn-25-aar-2018.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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