2018 (7) TMI 967 – AUTHORITY FOR ADVANCE RULINGS, RAJASTHAN – 2018 (14) G. S. T. L. 603 (A. A. R. – GST) – Chargeability of tax/GST – Classification of goods – support services of loading, unloading, packaging, storage or warehousing of agriculture produce – goods which comes for storage (Group A to Group G of Annexure A) – whether agricultural produce or not? – rate of GST – Cold Storage services – N/N. 11/2017 Central tax (Rate) dated 28/06/2017 and N/N. 12 2017 -Central lax (Rate) dated 28/06/2017.
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Whether the goods as mentioned in Group A to Group G of Annexure A which comes for storage will come under the definition of agricultural produce or not? – Whether the supply of Cold Storage services by the applicant firm to the goods as mentioned above in the table as Group A to Group G. attracts Nil rate of duty or not as per N/N. 11/2017 Central tax (Rate) dated 28/06/20172017 and N/N. 12 2017 -Central lax (Rate) dated 28/06/2017?
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Held that:- As per N/N. 12/2017 Central ta
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ssential characteristics but makes marketable for primary market .then the same would fall in the definition of agricultural produce given in aforesaid Notification and exemption would be available.
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Annexure A (Group B) – Turmeric (Haldi), Dried Ginger (Sonth) – Held that:- Processed goods mentioned in Group B do not belong to produce which are being sold in primary market and processes involved lead to considerable value addition indicating change in essential characteristics – goods mentioned in Group B do not fall under the definition of “Agricultural Produce’.
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Annexure A (Group C) – Tamarind – Held that:- Tamarind when harvested from tree consists of brittle outer shell which encapsulates the pulp and enclosed seed which in turn are sold by farmer in primary market. Shelling and removal of seeds to obtain the pulp is usually done by specially designed machines. Hence inner pulp without shell and seeds do not fall under the definition of Agricultural Produce’ as it loses
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hat:- In both the cases farmers are not usually involved in processing of product. Thus groundnuts without shell commonly called as Singhdana (ground mil seeds) and coconut without shell known as Copra gola do not fall into catogary of Agricultural Produce.
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Anncxure A(Groun G) – Dry fruits such as Fig ( Anjeer) Almond (Badaam), Walnuts ( Akhrot), Pistchio ( Pista), Lotus Seed Pop (Phool/Tal Makhana) etc. – Held that:- Products mentioned in Group G are processed by which the loose their essential characteristics – Hence do not fall under category of Agricultural Produce.
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Ruling:- Goods mentioned under Group A fall under the definition of Agricultural Produce in terms of the aforesaid notification and so supply of cold storage service in relation to these is exempt from the levy of GST . However if any processing is done on these products as is not usually done by a cultivator or producer at farm level , then these would fall outside the definition of agricultural produce as
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eks advance ruling over the coverage of definition of support services of loading, unloading, packaging, storage or warehousing of agriculture produce as explained at Explanation (i) (e) given at S.No 24 of the said notification. 2. That the applicant is the owner of the cold storage house and therefore provides storage and warehousing facilities to variety of agriculture produce. The explanation provided at pi. 4 (vii) of the notification defines agriculture produce as agricultural produce means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics hut makes it marketable for primary market. And If any Product falls under the definition of the agriculture produce, then by virtue of S. No 24 of the
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Jeera) 4. Carom seeds (Ajwain) 5. Fenugreek Seeds (KasooriMethi Dried) 6. Mustard Seeds (Sarson) 7. Brown Mustard Seeds(Rai) 8. Nigella Seeds (Kalonji) 9. Poppv seeds (Posara danna) The goods covered by this group are agriculture produce and brought by farmers in a ready to marketable shape. But being a product of agriculture the product contains certain small pieces of stones. dust, mud and other impurities etc. In order to sale to consumers and as per the requirement of various other allied laws like Food Safety and Standards Authority of India (FSSAI) The produce are require to be clean therefore aforementioned impurities are removed by cleaning which is either done by the cultivator or traders before it comes for storage purpose. But the agriculture produce retains its essential character and there is no change in the product or its marketability due to the cleaning process. The products which are sold by cultivator and stored at the applicant's cold storage, remains the same a
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ime of Hearing, before the Bench to explain the contention. Group-B Name of goods Stage at which commodities come for storage and process it anv applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Turmeric (Haldi) 2. Dried Ginger (South) 3. Dates(Khajoor) 4. Dry Dates (Chhuhara) 1. That the goods like Turmeric, Ginger, Dates, Dry Dates which are undoubtedly an agriculture produce but in order to make them marketable both the cultivator or the farmer undertakes the process of preserving by way of polishing or drying of the product which doesivt change the essential character of the products in question but makes it sustainable& marketable. The traders buy these goods and make them available for cold storage. Thus, products which are stored are an agriculture produce. 2. It is also pertinent to bring to your kind notice that sometimes the traders purchase the raw form from the farmers and get it polished to make it marketable and get i
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t ofTamarind) for sale. The Tamarind may or may not come for storage with seeds. 1. That as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the applicant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (vii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06 201 7 and hence attracts NIL rate of duty. 2. That the applicant will reproduce the sample of the goods at the time of Hearing, before the Bench to explain the contention. Group-D Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Traders before the products conies for Storage Purpose. Remarks 1. Dry Mango (Amchur) 2. Kathodi 3. Diy Gooseberry (Dry Amla) 4. Dry Water -Caltrop/Water Cashewnut (SukhaSingadha) 5. Dry Peas (SukhaMatar) The products that come for cold storage pur
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nce attracts NIL rate of duty. 2. That the applicant will reproduce the sample of the goods at the time of hearing before the Bench to explain the contention. Group-E Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Cinnamon (Dalchini) 2. Gum(Gond) 3. ArjunaChhal The products in a question are bark (Outer most layer of the wood) of the trees. The product always retains its natural shape as the bark is outermost part of the trees and without any processing it is ready to use or consume. It comes to market for sale and in a same shape/form as it is obtained bj the formers and also comes to storage houses in a same form as it is purchased from farmer as no processing is require. There is no intermediary process is ever done or require right from the point o\ peeling of the skin till the point of consuming. 1. That as per the description provided in Column No.2 t
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be easily appreciated that the Groundnut and coconut are always known. purchase, grown for the nut and its outer shell has no use whatsoever. So. removal of outer shell either at the hands of cultivator or at the hands of the trader will never bring any change in its essential character or marketability of the Groundnut and coconut The goods are always stored in its form without any processing ever done right from the stage of cultivator till storage. The removal of outer shell can never be categorised by any stretch of imagination as a process as it never contributes either to marketability or changing the essential character of the agriculture produce of Groundnut and Coconut. 1. That as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the applicant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (v
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as a process as its never contributes either to marketability or changing the essential character of the agriculture produce. 1. That as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the applicant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (vii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and hence attracts NIL rate of duty. 2. That the applicant will reproduce the sample of the goods at the time of hearing before the Bench lo explain the contention. 4. The applicant submitted that in respect of the products categorised from Group A to Group G above, it is very clear that none of the products discussed above goes through any processing till they come to the cold storage which changes the essential character or marketability of the agriculture produce purchase from the
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n No. 11/2017 Central tax (Rate) dated 28/06/2017 and Notification No 12/2017 -Central Tax (Kate) dated 28/6/17 (at point 2(d) of the notification) hence attracts NIL rate of duty as per S. No. 24 of the notification no 11/2017 or S. No 54 of the notification no 12/2017. Personal Hearing (PH) 6.1 In the matter personal hearing was given to applicant. Shri Alok Kumar Kothari .Advocate, appeared as representative of applicant for personal hearing on 05.05.2018. During the PH he reiterated the submission already made in the application for Advance Ruling submitted on 13/03/2018. Further he submitted a written submission to further clarity applicant s stand on the matter which was placed on the record. He requested that the case may be decided as per the above submission made earlier. 6.2 The jurisdictional officer in his/her comments dated 25.05.2018 has stated that goods mentioned in annexure A (Group A) could be covered under the definition of Agricultural Produce as defined under expla
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ra-State supply of services of description Support .services to agriculture, forestry, fishing, animal husbandry is applicable at NIL rate. In the said notification, in the Table, as per serial number 24. description of service given as. (i) Support services to agriculture, forestry, fishing, animal husbandry. Explanation. – Support services to agriculture, forestry, fishing, animal husbandry mean – (i) Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of- (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing: (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting. drying, cleaning, trimming, sun drying, fumigating, curing. – sorting, grading, cooling or bu
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or agricultural produce. Further definition of agricultural produce as defined under explanation 4 (vii) of the Notification No. 11/2017 Central lax (Rate) dated 28/06/2017 as agricultural produce means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is doneas is usually done by a cultivator or producer which does not alter its essential characteristics b marketable for primary market. 8.2 As per Notification No. 12/2017 Central tax (Rate) dated 28/06/2017. Sr. No. 54 in the table therein. Central tax on the intra-State supply of services of description Support services to agriculture, forestry, fishing, animal husbandry is exempt. In the said notification, in the Table, as per serial number 54, description of service given as Services relating to cultivation of plants and rearing of all life fo
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tion No. 12/2017 Central tax (Rate) dated 28/06/2017 as agricultural produce means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. 8.3 Agricultural Produce as per the definition given in above the Notifications . should necessarily have three essential elements: (a) It must be a produce out of cultivation of plant and rearing of all life forms of animals. (b) On which no further processing is done or such processing is done as usually done b\ a cultivator or producer which does not alter its essential characteristics i.e. produce must broadly retain its physical and chemical form/constitution.. (c) Most importantly the processing done should be such
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cation clearly deals with certain issue such as:-. 1. Primary Market :- Green tea leaves which attain primary marketability soon alter being plucked from tea plant is Agricultural Produce and not the dried tea leaves. 2. Essential characteristic :- Sugarcane looses its essential characteristic when processed as jaggery. Hence jaggery is not a Agricultural Produce . 3. Process :- Dehusking and splitting or both of pulses is not carried out by farmer or at farm level therefore pulses are not Agricultural Produce . While pulse grain such as whole grain, Rajama etc which are directly sold in primary market with little or no processing at farm level are regarded as Agricultural Produce . Before we decide that whether goods mentioned in Annexure A fall under category o\ agricultural produce or not they should be analyzed on basis of the following points: (a) Are the goods mentioned in Annexure A are those goods which are being sold by farmers/cultivators in Primary Market. (b) Are the activi
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mption would be available . However if any processing is done on above products as is not usually done by a cultivator or producer at farm level such as cleaning . sorting. colour-sorting, grading . cutting, splitting, drying, packing etc. using specialized machine or equipments)as is not usually done by a cultivator or producer at farm level),then it will fall outside the definition of agricultural produce as given in the aforesaid Notification. Annexure A (Group B) Turmeric (Ilaldi), Dried Ginger (Sonth): After harvesting from fields the produce is brought to primary market (mandis) as fresh green/raw turmeric and ginger where it is sold by farmers/cultivators. Further drying and polishing of them is a specialized process not usually carried out by cultivator which converts them into diy haldi (masala) and into dried ginger (Sonth. kirana item) hence changing the essential characteristic. Similarly dates and dry dates also after being sold in primary market go under specific process
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athodi, Dry Cooseberiy (Sukha Amla) is obtained from processing of green Gooseberry (Kucha Amla). Dry Water Caltrop/Water Cashewnut (dry Singadha) is processed into Sukha Singadha from Hara/Gila Singhda , Dry Peas (Sukha Matar) is obtain from processing of green peas (Hara matar). Green/raw mango, green kathodi. kachha amla. gila Singhada. hara Matar arc harvested by farmer fresh and brought to primary market(mandis) from where its bought by traders/processors who intern under take certain specific processes such as washing , cutting, shelling, cleaning, drying, packing etc. These processes lead to a considerable value addition as compared to that of product sold in primary market which is in itself reflection of change in there essential characteristic hence the above cannot be characterized as Agricultural produce. Annexure A (Group E) Cinnamon ( Dalehini), Gum (Gond), Arjuna Chaal ( Arjun Chaal) : Cinnamon (Species) is obtained from the inner bark of a tree, species Genus CTNNANOMUN
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ra Gola) Groundnuts (Mungfalli) is harvested from the farms and sold with outer shells in primary market. Later by help of machines outer shell is removed and groundnut seeds are separated. Same is the case with coconut(copra gola) which is sold in Primary market by the cultivator as commonly known as Nauriyal with outer fibrous husk or coir covering. Specialized plants are set up to remove the outer coir (dehusking) and inner hard shell (deshelling). Hence in both the cases farmers are not usually involved in processing of product. Thus groundnuts without shell commonly called as Singhdana (ground mil seeds) and coconut without shell known as Copra gola do not fall into catogary of Agricultural Produce. Anncxure A(Groun G) Dry fruits such as Fig ( Anjeer) Almond (Badaam), Walnuts ( Akhrot), Pistchio ( Pista), Lotus Seed Pop (Phool/Tal Makhana) etc. Dry fruits as the name suggests, is obtained by drying of fresh fruits or other plain products. All of them are harvested and sold in prim
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