Bentonite powder used for earthing purpose is taxable @18% GST

In re M/s Excel Earthings (GST AAR Kerala)

(i) The classification of “Bentonite Powder” while using for electrical earthing (8kg and 6kg packet) and its effective tax rate.

Bentonite Powder used for electrical earthing is commercially known as ‘Back Fill Compound’ and it consist of mixture of Bentonite powder, wood charcoal powder, Graphite powder and Sodium sulphate. This mixture is used as an agent for reducing surface tension. Hence it comes under the Heading 3824.99.17 and is taxable at the rate of 18% as per SI No. 97 of Schedule III of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017

(ii) Our competitors, selling the Bentonite Powder @ 5% (in electrical shops for earthing purpose), whether it is correct as per the provision of the Act?

Mixture of Bentonite powder used for earthing purpose is liable to GST at the rate of 18%.

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