Chapter 38 - Miscellaneous chemical products

Notes

This Chapter does not cover:
1. separate chemically defined elements or compounds with the exception of the following:
  1. artificial graphite (heading 3801);
  2. insecticides, rodenticides, fungicides, herbicides, anti-sprouting pro-ducts and plant-growth regulators,disinfectants and similar products, put up as described in heading 3808;
  3. products put up as charges for fire-extinguishers or put up in fire-extinguishing grenades (heading 3813);
  4. certified reference materials specified in Note 2 below;
  5. products specified in Note 3(a) or 3(c) below;
2. mixtures of chemicals with foodstuffs or other substances with nutritive value, of a kind used in the preparation of human foodstuffs (generally, heading 2106);
3. slag, ash and residues (including sludges, other than sewage sludge), containing metals, arsenic or their mixtures and meeting the requirements of Note 3(a) or 3(b) to Chapter 26 (heading 2620);
4. medicaments (Heading 3003 or 3004);
5. spent catalysts of a kind used for the extraction of base metals or for the manufacture of chemical compounds of base metals (heading 2620), spent catalysts of a kind used principally for the recovery of precious metal (heading 7112) or catalysts consisting of metals or metal alloys in the form of, for example, finely divided powder or woven gauze (Section XIV or XV).
(A) For the purpose of heading 3822, the expression "certified reference materials" means reference materials which are accompanied by a certificate which indicates the values of the certified properties, the methods used to determine these values and the degree of certainty associated with each value and which are suitable for analytical, calibrating or referencing purposes.
(B) With the exception of the products of Chapter 28 or 29, for the classification of certified reference materials, heading 3822 shall take precedence over any other heading in the Schedule.
Heading 3824 includes the following goods which are not to be classified in any other heading of this Schedule:
1. cultured crystals (other than optical elements) weighing not less than 2.5 g each, of magnesium oxide or of the halides of the alkali or alkaline-earth metals;
2. fusel oil; Dippel's oil;
3. ink removers put up in packings for retail sale;
4. Stencil correctors, other correcting fluids and correction tapes (other than those of heading 9612), put up in packings for retail sale; and;
5. ceramic firing testers, fusible (for example, seger cones).
Throughout the Schedule, "municipal waste" means waste of a kind collected from households, hotels,restaurants, hospitals, shops, offices, etc., road and pavement sweepings, as well as construction and demolition waste.Municipal waste generally contains a large variety of materials such as plastics, rubber, wood, paper, textiles, glass, metals, food materials, broken furniture and other damaged or discarded articles. The term "municipal waste", however,does not cover:
1. individual materials or articles segregated from the waste, such as wastes of plastics, rubber, wood. paper, textiles, glass or metals and spent batteries which fall in their appropriate headings of the Schedule:
2. industrial waste;
3. waste pharmaceuticals, as defined in Note 4(k) to Chapter 30; or
4. clinical waste, as defined in Note 6(a) below.
For the purposes of heading 3825, "sewage sludge" means sludge arising from urban effluent treatment plant and includes pre-treatment waste, scourings and unstablised sludge. Stablised sludge when suitable for use as fertiliser is excluded (Chapter 31).
For the purposes of heading 3825. the expression "other wastes" applies to:
1. clinical waste, that is, contaminted waste arising from medical research, diagnosis, treatment or other medical, surgical, dental or veterinary procedures. which often contain pathogens and pharmaceutical substances and require special disposal procedures (for example, soiled dressings, used gloves and used syringes);
2. waste organic solvents;
3. wastes of metal pickling liquors, hydraulic fluids, brake fluids and anti-freezing fluids; and
4. other wastes from chemical or allied industries
The expression "other wastes" does not, however, cover wastes which contain mainly petroleum oils or oils obtained from bituminous minerals (heading 2710).
For the purposes of heading 3826, the term "biodiesel" means mono-alkyl esters of fatty acids of a kind used as a fuel, derived from animal or vegetable fats and oils whether or not used.

GST Rates of Goods

Chapter Heading	Description	Rate of GST	Schedule	Sr.No
28	Micronutrients, which are covered under serial number [1(f)] of Schedule 1, Part (A) of the Fertilizer Control Order. 1985 and are manufactured by the manufacturers which are registered under the Fertilizer Control Order, 1985	5%	I	56
38	Micronutrients, which are covered under serial number I[1(g)] of Schedule 1. Part (A) of the Fertilizer Control Order.1985 and are manufactured by the manufacturers which are registered under the Fertilizer Control Order, 1985	5%	I	56<sup>2</sup>
3801	Artificial graphite; colloidal or semi-colloidal graphite; preparations based on graphite or other carbon in the form of pastes. blocks,plates or other semi-manufactures	18%	III	80
3802	Activated carbon; activated natural mineral products; animal black,including spent animal black	18%	III	81
3804	Residual lyes from the manufacture of wood pulp, whether or not concentrated, desugared or chemically treated, including lignin sulphonates	18%	III	83
3805	Gum, wood or sulphate turpentine and other terpenic oils produced by the distillation or other treatment of coniferous woods; crude dipentene; sulphite turpentine and other crude para-cymene; pine oil containing alpha-terpineol as the main constituent	18%	III	84
3806	Rosin and resin acids, and derivatives thereof; rosin spirit and rosin oils; run gums	18%	III	85
3807	Wood tar; wood tar oils; wood creosote; wood naphtha; vegetable pitch; brewers' pitch and similar preparations based on rosin, resin acids or on vegetable pitch	18%	III	86
3808	The following Bio-pesticides, namely -<br>1 Bacillus thuringiensis var. israelensis <br>2 Bacillus thuringiensis var. kurstaki <br>3 Bacillus thuringiensis var. galleriae <br>4 Bacillus sphaericus <br>5. Trichoderma viride<br>6. Trichoderma harzianum<br>7 Pseudomonas fluoresens<br>8 Beauveriabassiana<br>9 NPV of Helicoverpaarmigera<br>10. NPV of Spodopteralitura<br>11. Neem based pesticides<br>12. Cymbopogan	5%	I	78A<sup>3</sup>
3809	Finishing agents, dye carriers to accelerate the dyeing or fixing of dyestuffs and other products and preparations (for example,dressings and mordants), of a kind used in the textile, paper, leather or like industries, not elsewhere specified or included	18%	III	88
3810	Pickling preparations for metal surfaces; fluxes and other auxiliary preparations for soldering, brazing or welding; soldering, brazing or welding powders and pastes consisting of metal and other materials; preparations of a kind used as cores or coatings for welding electrodes or rods	18%	III	89
3811	Anti-knock preparations. oxidation inhibitors, gum inhibitors. viscosity improvers, anti-corrosive preparations and other prepared additives, for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils	28%	IV	38
3812	Prepared rubber accelerators; compound plasticisers for rubber or plastics, not elsewhere specified or included; anti-oxidising preparations and other compound stabilisers for rubber or plastics.; such as Vulcanizing agents for rubber	18%	III	90
3813	Preparations and charges for lire-extinguishers; charged fire extinguishing grenades	28%	IV	39
3814	Organic composite solvents and thinners. not elsewhere specified or included; prepared paint or varnish removers	28%	IV	40
3815	Reaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included	18%	III	91
3816	Refractory cements, mortars, concretes and similar compositions,other than products of heading 3801	18%	III	92
3817	Mixed alkylbenzcnes and mixed alkyl naphthalenes, other than those of heading 2707 or 2902	18%	III	93
3818	Silicon wafers	5%	I	79
3819	Hydraulic brake fluids and other prepared liquids for hydraulic transmission, not containing or containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals	28%	IV	41
3820	Anti-freezing preparations and prepared de-icing fluids	28%	IV	42
3821	Prepared culture media for the development or maintenance of microorganisms (including viruses and the like) or of plant, human or animal cells	18%	III	95
3822	All diagnostic kits and reagents	12%	II	80
3823	Industrial monocarboxylic fatty acids, acid oils from refining;industrial fatty alcohols	18%	III	96
3824	Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries(including those consisting of mixtures of natural products), not elsewhere specified or included	18%	III	97
3825	Residual products of the chemical or allied industries, not elsewhere specified or included;[except municipal waste; sewage sludge; other wastes specified in Note 6 to this Chapter.]	18%	III	98
3826	Biodiesel and mixtures thereof, not containing or containing less than 70% by weight of petroleum oils and oils obtained from bituminous minerals	18%	III	99
28	Micronutrients, which are covered under serial number [1(g)] of Schedule I. Part (A) of the Fertilizer Control Order, 1985 and arc manufactured by the manufacturers which are registered under the Fertilizer Control Order, 1985	12%	II	56<sup>1</sup>
28	Micronutrients, which are covered under serial number I[1(g)] of Schedule 1. Part (A) of the Fertilizer Control Order.1985 and are manufactured by the manufacturers which are registered under the Fertilizer Control Order, 1985	12%	II	56<sup>2</sup>
3808	Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products	18%	III	87
3808	Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products [other than hio-pesticides mentioned against S. No. 78A of schedule -11]	18%	III	87<sup>1</sup>
3811	Anti-knock preparations, oxidation inhibitors, gum inhibitors, viscosity improvers, anti-corrosive preparations and other prepared additives, for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils	18%	III	89A
3813	Preparations and charges for fire-extinguishers; charged fire extinguishing grenades	18%	III	90A
3814	Organic composite solvents and thinners, not elsewhere specified or included; prepared paint or varnish removers	18%	III	90B
3818	Chemical elements doped for use in electronics, in the form of discs, wafers or similar forms; chemical compounds doped for use in electronics [other than silicon wafers]	18%	III	94
3819	Hydraulic brake fluids and other prepared liquids for hydraulic transmission, not containing or containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals	18%	III	94A
3820	Anti-freezing preparations and prepared de-icing fluids	18%	III	94B
3826	Bio-diesel	18%	III	80A
3803 00 00	Tall oil, whether or not refined	18%	III	82
3825	Municipal waste, sewage sludge, clinical waste	0%	-	110

Other Exemptions

Description	Notification
Exemption from Registration - Small Taxpayers having turnover below threshold limit	Notification No. 10/2019-C.T., dated 7-3-2019
Composition Levy Scheme for Small Taxpayers having Turnover Up to Rs. 1.5 Crore — Old Scheme	Notification No. 8/2017-C.T., dated 27-6-2017
Composition Levy Scheme for Small Taxpayers having Turnover up to Rs. 1.5 Crore — New Scheme	Notification No. 14/2019-C.T., dated 7-3-2019
Scheme to Pay GST 0 6% - For Taxpayers having turnover less than Rs. 50 Lakhs and Not Eligible for Composition Scheme.	Notification No. 2/2019-C.T. (Rate), dated 7-3-2019
Exemption to Specified Goods supplied to Specified Recipients for Petroleum Exploration etc.	Notification No. 3/2017-Central Tax (Rate), dated 28-6-2017]
Exemption to Goods Supplied to CSD by way of Refund	Notification No. 6/2017-Central Tax (Rate), New Delhi, dated 28-6-2017.
Exemption to goods supplied by CSD	Notification No. 7/2017-Central Tax (Rate), New Delhi, dated 28-6-2017
United Nation, International Organisation and Foreign Diplomatic Mission Notified as Entitled for refund of GST Paid on supplies received.	Notification No. 16/2017-Central Tax (Rate), dated 28-6-2017
Reduced GST on Supply of Goods to Exporter	Notification No. 40/2017-CT. (Rate), dated 23-10-2017
Concessional GST on Supply of Scientific and technical equipment to research institutions	Notification No. 45/2017-C.T. (Rate), dated 14-11-2017

Departmental Clarifications / Case Law

Palm Steari:

Palm Stearin - C.B.E. & C. Circular No. 81/2002-Customs, dated 3-12-2002 was issued in the context of the then existing entries in the First Schedule to the Customs Tariff Act, 1975. Similarly, in the judgment of Hon'ble Supreme Court, in Commissionerv. Jocil Ltd. [2011 (263) ELT 9 (S.C.)], it was held that 'palm stearin' is specifically identified in Chapter sub-heading No. 3823 11 as 'Palm Stearin',. However, the said judgment was rendered for the period August, 2003 to November, 2004. As the relevant entries for Chapter Heading 1511 and 3823 have been amended vide Finance Act, 2017, the C.B.E. & C. Circular No. 81/2002-Customs, dated 3-12-2002 and the Hon'ble Supreme Court's judgment in the case of Jocil Ltd. (supra) are not applicable in the present case. Now there being specific Tariff Item `Refined bleached deodorized palm stearin' classifiable under 1511 90 30 - In Re: Gokul Agra Resources Limited 2018 (18) G.S.T.L. 68 (A.A.R.-GST)

HIV detection kits and Hepatitis C detection kits

HIV detection kits and Hepatitis C detection kits containing antigens obtained from micro-organism cultures, immobilised on a porous immuno-filtration membrane and which work on antigen-antibody reaction (neutralisation) would be covered by Heading 30.02 and not under 38.22, J. Mitra & Co. Ltd. v Commissioner, 2013 (288) ELT 229 (Tri. - Del.

Tile Adhesive and Tile Grout

Tile Adhesive and Tile Grout - HSN Code 32.14 included "preparations in powder form based on quartz and cement with small quantities of added plasticizers, used for instance, after adding water, for setting wall or floor tiles"- Polymers used in said products acts as plasticizers - Tile Adhesive specifically used for setting tiles, whether on floor, walls or other tiles, etc. - - Tile grout being compound used as joint filler between tiles used for setting wall/floor tiles because same is used between two tiles as an adhesive by way of filling gap between two tiles so that the tiles become attached to each other - Products classifiable under Entry 24 of Schedule IV of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017 liable to GST @ 28%. In Re: Asian Paints Lid., 2019 (21) G.S.TL. 338 (A.A.R. - GST).

Tile Adhesive and Joint Filler

Tile Adhesive and Joint Filler- The product is manufactured by mixing natural products like silica sand, dolomite powder, cement and chemicals. The firm has obtained mining lease license from Mining & Geology Department for manufacturing value addition products like tile adhesive, joint filler etc. from silica sand. The product is manufactured by mixing natural products like silica sand and dolomite powder with cement and chemicals and would , therefore, come under the classification 'prepared binder'.specified under HSN 3824 which is taxable @ 18% GST In Re: New RV Enterprises, 2018 (18) G.S.T.L. 108 (A.A.R. - GST).

Silicon Wafers

Silicon Wafers - Without the Silicon wafer, the functional value of the Photovoltaic cell is NIL. If we take out Silicon wafer from the photovoltaic cell, nothing remains as such. Any manufactured product implies the use of raw materials , assemblies, components & parts in required quantity. So, in order to qualify as 'Part of the whole', something should remain after the part is taken out of the whole. So in the present case, though the Silicon wafer has substantial physical & independent identity, yet when it is taken out of the solar cell, nothing remains & secondly, it cannot be used in another cell as it gets totally damaged. A photovoltaic cell can at best be termed as chemical treated 'Silicon wafer' along with other items so as to infuse it with the properties of a solar cell'. That is why cannot be termed as the 'Part of the Photovoltaic Cell' for the purpose of Entry-234 of Schedule-I of Notification No. 1/20 Tax (Rate), dated 28-6-2017. In Re: Jupitar Solar Power Ltd.,2018 (18) G.S.T.L. 53 (A.A.R. - GST)

Back Fill Compound

Back Fill Compound - 'Back Fill Compound' is prepared by mixing Bentonite Powder, Wood Charcoal Powder and Graphite Powder. Tariff Heading 2508 covers 'Other clays (not including expanded clays of Heading 6806), andalusite, kyanite and sillimanite, whether or not cIacined; mullite; chrotte or dinas earths. Bentonite (Crore or other - including processed and ground) s covered under Tariff Heading 2508. However, as per Note I of Chapter 25. the headings of this Chapter do not cover products that have been obtained by mixing. Hence 'Back Fill Compound' would not fall under Tariff Heading 2508.. Tariff Heading 2805 covers `Alkali or alkaline-earth metals; rare-earth metals, scandium and yttrium, whether or not intermixed or interalloyed; mercury'. The applicant has not submitted anything indicating how the product 'Back Fill Compound' can be termed as 'Alkali or alkaline earth-metals or rare-earth metals etc. or mercury, to be covered under Tariff Heading 2805. Therefore, the said product would not fall under Tariff Heading 2805. Tariff Heading 3824 covers 'Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included'. Accordingly, the product 'Back Fill Compound' merit classification under Tariff Heading 3824. In Re: Doc Sun Power Pvt. Ltd. 2018 (14) G.S.T.L. 94 (A.A.R. - GST)

Palm Stearin

Palm Stearin - In the case at hand, the subject matter in question is specifically identified in Ch. sub-heading No. 3823 11 as "Palm Stearin", and further differentiated as "Crude" and "RBD" in sub-heading Nos. 3823 11 11 and 3823 11 12 respectively. The Explanatory Notes are categorical in affirming the accepted practice that Rule 3(b), which the CESTAT and the Respondent has referred to. shall be used only if classification under Rule 3(a) fails. In this instance, we are of the considered opinion that the issue of the essential character of the subject matter in question may be resorted to only if identification under Rule 3(a) is impossible. Since the description offered in Chapter 38 certainly attempts to identify 'Palm Stearin' within its ambit cannot be classified as animal or vegetable edible oil as for the goods to fall under Chapter 15. - Cmmissioner v Jodi Ltd.- 2011 (263) ELT 9 (SC).

Ramming Mass

Ramming Mass which is a Refractory Material, is classifiable under HSN Code 3816 and would attract 18% rate of tax under GST (9% CGST + 9% SGST). In Re: Raghav Productivity Enhancers Ltd. 2018 (18) G.S.T.L. 637 (A.A.R. - GST)

Organic Composite Solvents

Organic Composite Solvents — Party claims classification under the Tariff Item No. 3814 00 10. However it appeared to Revenue that since Naphtha was used as input the final product emerged should be classified as Motor Spirit under Tariff Item No. 2710 11 11. Revenue wanted to classify the same as Motor Spirit and there is categorical report from the CRCL that they did not have facility to conduct the experiment whether goods manufactured by the respondent could be used in actual running of the Internal Combustion Engine. Therefore, relying on the Hon'ble Supreme Court decision in the case of Mis. Jagdamba Petroleum Chemical 01 Ltd. v CCE reported at 2007 (212) ELT A112 (S.C.) it is held that that there were no grounds to classify the said goods manufactured by respondent as Motor Spirit. CCE Lucknow v Kuchchal Chemicals Ltd. 2018 (17) G.S.T.L. 435 (Tri. - All.).

Palm oil

Palm oil products containing containing 9% to 19% of palmitic acid with high ester value and mainly composed of glycerides of stearic acid along with free fatty acid are classifiable under CTH 1511 10 00 and not under CTH 3823 — Gokul Enterprises v Commissioner- 2009 (235) ELT 529 (Tri.-Ahmd.).

Binding Agent - Binding Agents consists of acrylic binder silicone antifoam, wetting agent, ammonium hydroxide, ammonium chloride and water. It is stated used for binding non-woven webs during the course of manufacture of non-woven fabrics. The product under reference is stated to find use in binding webs of non-woven fabrics. Binding "webs" during the course of manufacture of non-woven fabrics is, therefore, part of manufacture of non-woven fabrics. It cannot be considered as a "process or"finishes". "Process" and "Finishes" are those described under Note \'A\' to heading 38.09, from (1) to (13). Secondly, it has been argued that unless a product is suitable for use as glue or adhesives, put up for retail sale as glue or adhesives, not exceeding a net weight of 1 Kg. cannot be classified under heading 35.06. However, heading 35.06 of C.E.T. refers to only "Prepared glues and other prepared adhesives, not elsewhere specified". The word "suitability for use as glues and adhesives and being put in a unit container of weight not exceeding 1 Kg" are not mentioned in the Central Excise Tariff.. In the instant case product is used as an adhesive for binder textile fibres. In view of the foregoing the product would more appropriately by covered under heading 35.06 of C. Ex. Tariff Act, 1985. CBEC Circular No. 53/89, dated 20-9-1989.

Boric acid

Boric acid- Technical grade pesticides for insecticidal use or Boric acid put up for retail sale or other specified forms as preparations or articles alone is classifiable under CTH 3808 and otherwise under CTH 2810- M.F. (D.R.) Circular No. 34/2007-Cus., dated 17-9-2007- 2007 (216) ELT (T4).

Cellulose Fibre

Cellulose Fibre - item is known to find use as reinforcement agent in rubber industry.Plasticisers and stiffening/reinforcements agents perform opposite functions and the present item which is for reinforcement cannot be treated as Plasticisers and classified under 3812.20. Appropriately classifiable as Pulp under 47.06. — Samson Rubber Industries v Commissioner 2005 (185) ELT 419 (Tri.-Chennai).

Resin coated sand

Resin coated sand- HS code 3824 covers prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products). Thus, resin coated sand falls under HS code 3824 and attracts 18% GST. C.B.I. & C.Circular F. No. 332/2/201 7-TRU, dated 7-12-2017