Exhausted Activated Mineral Product Taxable at 18% GST, Holds AAR

M/s Sri Venkatarama Gaia Pvt. Ltd., engaged in refining rice bran oil, uses activated bleaching earth and carbon during the bleaching stage. After filtration, the exhausted material (“spent bleaching earth” or “spent earth”) is removed and sold for further processing.

The applicant had classified it under HSN 38029019 and paid GST at 18%. However, some buyers contended it should fall under HSN 25082010 taxable at 5%, leading the applicant to seek an advance ruling on correct classification and rate.

Main Issue: What is the correct HSN classification and applicable GST rate on “spent bleaching earth” arising during edible oil refining?

AAR Decided: The Hon’ble AAR held that spent bleaching earth is classifiable under HSN 38029019 and attracts GST at 18% (9% CGST + 9% SGST). The Authority observed that spent bleaching earth is not a natural clay in its crude or processed form but an activated mineral product that has been chemically treated and subsequently exhausted in use. Though mineral-based, it loses its adsorption capacity and original character as bleaching earth after use.

Referring to the General Rules for Interpretation and Notification No. 9/2025–Central Tax (Rate) dated 17.09.2025, the AAR noted that Chapter 25 covers natural clays and decolourising earths but does not extend to activated mineral products that have undergone chemical treatment and use.

Whereas, Chapter 38, HSN 3802, includes activated natural mineral products and analogous spent materials. Therefore, classification under Chapter 38 (HSN 38029019 – “Other”) was held to be legally appropriate, and GST at 18% was confirmed as applicable.

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