Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 1-2-2019 – The green tea leaves plucked from the plants are not fit for the human consumption. It cannot be sold in the open market for human consumption. The raw tea leaves are withered by exposure in the shadow of the sun or by heating in trays until pliable. The tea leaves normally undergo the following standard procedures prior to procurement- Tea leaves are plucked from the tea plant. Thereafter the leaves are rolled by hand or machine in order to break the leaf cells and liberate the juices and enzymes. Finally the leaves are completely dried either by further exposure to the sun, over fires, or in a current of hot air. Then the leaves are fermented in baskets, glasses and in clothes. Thereafter the leaves are subjected to grading with sieves of various sizes. The leaves are finally roasted with charcoal for obtaining suitable flavor and color. Then the said tea is packed in the bulk packs. All the above processe
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651 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA, the appellant company had been granted licence for carrying out business of warehousing under the Bombay Warehousing Act, 1959. The appellant constructed warehouses at various places including at Fursungi, Pune. M/s Unilever India Exports Limited produces tea of various qualities in bulk either from public tea auctions or directly from the manufacturers of tea in 50 Kg bags and stores them in the said warehouse. The said procurement was undertaken during season. Unilever undertook blending and packing of tea at the warehouse and exported to various overseas countries. The appellant was of the view that the tea, procured in bulk, either from public tea auctions or directly from manufacturers of tea is an agricultural produce as defined in Notification No. 12/2017-Central Tax (Rate), since the tea is not losing the essential characteristics of tea. Therefore the tea is exempted from GST. However the appellant intended to get advan
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gone change from the green tea leaves to the black tea. The client of the appellant stated that their main and the sole ingredients are black tea of various qualities, which are blended in the specific proportion as per the specific orders received from their respective customers before packing the same. The Appellate Authority inferred that the product being stored in the warehouse has got different name, character and uses from the green tea leaves which are cultivated in the tea gardens. The Appellate Authority inferred that there is no doubt that the processes or treatments in which are performed upon the green tea leaves amounts to manufacture as per definition under section 2(72) of Central Goods and Services Tax Act, 2017. The said fact is acknowledged by the appellant. The Appellate Authority also analyzed the definition of agricultural produce under clause 2(d) of the Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017. The Appellate Authority listed out the followin
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agricultural produce. Thus the manufactured products do not fulfill the above prescribed criteria of the agricultural produce. The Appellate Authority held that the black tea cannot be considered as agricultural produce. The Appellate Authority rejected the contention of the appellant that the said processes carried out on the green tea leaves do have bearing on the taste and color of the tea does not alter the characteristics of the tea. If tea stored in appellant s warehouse is agricultural produce, the same should be covered under the Notification No. 12/2017-Central Tax- Rate. But the processes carried out by the client of the appellant, as submitted by the appellant, leaves no doubt in one s mind that they have lost the nature and characteristics of an agricultural produce in terms of definition of agricultural produce and are ready for secondary or tertiary market. The intention of the legislature has never been to exempt agricultural produce at every stage. Had it been the case
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