In re Sardar Chemical Industries (GST AAR Gujarat)
The Gujarat Authority for Advance Ruling (AAR) considered an application filed by M/s. Sardar Chemical Industries regarding the correct GST classification and applicable tax rate for Papad Khar, also described as alkaline salt, sajji khar, or a potassium carbonate-based alkaline compound. The applicant submitted that Papad Khar is a traditional Indian food ingredient used in the preparation of papad, khichdi, fafda and similar food items and functions as a raising agent and alkalizing compound that imparts crispness, puffing and extended shelf life. The applicant stated that the product was presently being classified under HSN 2836 attracting 18% GST but contended that it should instead be classified either under HSN 2501 (Common Salts) or HSN 2102 (Prepared Food Additives/Condiments) attracting 5% GST, or alternatively qualify for exemption under Notification No. 2/2017-Central Tax (Rate).
The applicant explained the complete manufacturing process involving heating water, dissolving sodium chloride, adding sodium carbonate and sodium bicarbonate, transferring the mixture for cooling and solidification, drying the material and finally packaging the product. The applicant also furnished the product’s chemical composition, comprising approximately 70% sodium chloride, 15% sodium carbonate, 15% sodium bicarbonate, with possible potassium carbonate and minimal moisture.
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