2018 (9) TMI 1258 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2018 (17) G. S. T. L. 151 (A. A. R. – GST) – Levy of GST – service by the commission agents to the agriculturists for their sale or purchase of their produce not involving the agents – Whether service by the commission agents to the agriculturists for their sale or purchase of their produce not involving the agents as either a recipient of goods or as a supplier of goods are liable to tax or not?
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Held that:- It is clear that the agent, who is a member of the applicant stores the turmeric in their godown, the sales of which is as per the guidelines of EMC. Also from the invoices furnished, it is seen that the invoice is raised by the agent on the buyer wherein the agriculturist is mentioned as the seller and is signed by the Farmer, agent and the buyer. Further, it is seen that the buyer pays the agent who after deducting his commission for the services rendered passes on the sale proceeds to the farmer. It is evident
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Ruling:- The service by the Commission Agents as per the submissions of the applicant to the agriculturists of turmeric is service under the Heading 9986 and is taxed to 'NIL' rate of CGST as per Sl.No. 24 (i) (i) (g) of the Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended and 'NIL' rate of SGST as per Sl.No. 24 (i) (i) (g) of G.O.(Ms) No 72 dated 29.06.2017 No. II(2)/CTR/532(d-14)/2017 as amended. – TN/06/AAR/2018 Dated:- 30-8-2018 – MS. MANASA GANGOTRI KATA AND THIRU S. VIJAYAKUMAR, MEMBER, Note : Any appeal against the advance ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for ce
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have stated that they are registered Sangam with 357 members under the Tamilnadu Societies Registration Act 1975. Their activities as agents and Service are regulated and permitted by the Erode Marketing Committee (hereinafter referred as EMC) Erode. The members permitted by EMC as agents own their godowns where the agriculturists produce are kept, stored in safe custody. A tender is conducted at the premises/ yard of the EMC. The tender is concluded when the selling price is agreed by the agriculturists. Thereafter the buyer raise a bill on the basis of weighment receipt in favour of the agriculturists with full details. An agreement among and between agriculturists, agents and buyer is executed for payment. The buyer issues a cheque for the sale of the agricultural produce to the agents as per the agreement. On realization, the agent takes his commission for service rendered, balance being returned to agriculturist. They have stated that the agent is neither a seller nor a buyer but
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y 5, 1989 with reference to Sec 2(7) and Section 8(1) (C) on the license granted by the Marketing Committee. 4. On scrutiny of the various submissions of the applicant, it is seen that the applicant is society registered under Tamilnadu Societies Registration Act 1975 whose members are governed by Erode marketing Committee which an Agricultural is marketing committee licensed under Tamilnadu Agricultural Produce Marketing (Regulation) Act 1987. Section 2(7) of 'The Tamilnadu Agricultural Produce Marketing (Regulation) Act 1987, defines 'Commission agent' in respect of agricultural produce marketing as follows: 2. (7). Commission Agent means a person who by himself or through his servants, buys and sells agricultural produce for another person keeps it to his custody and controls it during the process its purchase and sale, and collects payment therefore from the buyer and pays it to the seller, and receives by way of remuneration a commission or percentage upon the amount i
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14) of Erode Marketing Committee, a maximum commission of ₹ 5 per 100 rupees worth is prescribed for turmeric in all forms. Sub clause 24(15) states In the case of commission sales, no allowance other than a trade allowance separately prescribed shall be charged either to seller or to buyer. If commission is charged to both buyer and seller, the total thereof shall not exceed the maximum prescribed in sub -clause (14). The applicant submitted the criteria for the Commission Charges subject to the Bye-Laws 24(14) are as follows: Sl. No. Month Commission Amount 1. Up to 12 Months 3% 2. Up to 24 Months 4% 3. Above 24 Months 5% Also from the agreement note between agriculturist, buyer and agent, weighment slip and invoices furnished, it is seen that the invoice is raised by the agent on the buyer wherein the agriculturist is mentioned as the seller and is signed by the Farmer, agent and the buyer. All the three documents mention the weight of the goods and the sale price and separate
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ellip;……….., (b). (c) ……………….., (d). (e) ……………….., (g) Services by an Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce NIL Explanation 4 (vii) and (viii) of the Notification No. 11/2017-CT (Rate) states that: (vii) 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. (viii) Agricultural Produce Marketing Committee or Board means any committee or board constituted under a State law for the time being in force of the purpose of regulating
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the definition of 'Commission agent' under 'The Tamil Nadu Agricultural Produce Marketing (Regulation) Act, 1987'. Section 7(8) of this Act also states that trading in agricultural produce must take place on in notified areas which are licensed from a Market Committee under that Act. These Commission agents provide the space for storage, weighment and facilitate buying and selling of the produce. The word 'Commission agent' under SI.No. 24 of the Notification No. 11/2017-CT (Rate) is not specifically defined in the said notification but Section 2(5) of the CGST Act defines 'agent' as a person, including commission Agent who carries on the business of supply or receipt of goods or services or both on behalf of another. From the supporting documents and materials filed by the applicant and the various statutory provisions discussed above, it is clear that the activities of the applicant are those services provided by an agent to the farmer, generally prov
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