Goods and Services Tax

Goods and Services Tax – GST – By: – CA Venkata prasad Pasupuleti – Dated:- 12-6-2018 – Introduction: It is common practice prevailing in many industries that certain materials are provided by the customer to the manufacturer or contractor. This is done for various business or economic reasons. For example, moulds, jigs and dies etc., are provided by the Original Equipment Manufacturers (OEM) to a component manufacturer in the automobile industry. Similarly, the client would be supplying the steel and cement to the contractor in the construction contracts. Let us say, the contract price for the building construction is 10 crores wherein the contractor has to incur all the cost. Instead of this, it may be agreed that the cement & steel are to be supplied by the client and contractor would execute the work using the same thereby bringing down the contract price to ₹ 7 crores. In the first case, the Government would be able to levy a tax on entire ₹ 10 crores thereby earn

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IGST). To determine whether free supplies are to be includible in the taxable value or not, the primary question to be answered is whether price agreed in the contract (wherein the price of free supplies is not factored) would constitute the consideration at first instance and thereby to construe the same as sole consideration and accordingly the provisions of section 15, ibid qua Transaction value can be adopted. Section 2(31) defines consideration which reads as follows: consideration in relation to the supply of goods or services or both includes- any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both,

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uable benefit passed on by the promisor to the promisee or by the transfer of to the transferee. . The rationale of this decision was discussed & applied even in the context of service tax [Bhayana Builders Pvt. Ltd. v. Commissioner – 2013 (9) TMI 294 – CESTAT NEW DELHI (LB) = 2013 (32) S.T.R. 49 (Tribunal-LB)]. A similar view was expressed under Central Excise law by the Hon ble Supreme court in case of Commissioner v. Fiat India Pvt. Ltd. – 2012 (8) TMI 791 – SUPREME COURT = 2012 (283) E.L.T. 161 (S.C.) (Para 58). Thus, any consideration whether monetary or otherwise should have flown or should flow from the payer to the payee and should accrue to the benefit of the later. The holistic reading of the definition given under GST (extracted supra) also gives similar meaning as explained by the Hon ble supreme court. The above theory remains unchanged and does not get affected even after applying the inclusive part of the consideration definition as it attempts to cover the payments/

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xes (Central Excise, VAT, service tax etc.,) the taxable events are restrictive in the gamut of entire supply chain and governed by the different laws and of course by the different Governments (Centre or State). For instance, the Central Excise can be levied only at the stage of manufacture , VAT only at the time of sale . Because of this restrictive application and in order to avoid the revenue leakage, the old laws attempted to tax the free supplies . However, as GST is levied on the common taxable event known as supply across the entire supply chain and leviable at all stages and the tax charged by the supplier is anyway available as input tax credit (ITC) to the recipient (except when the ITC is specifically restricted or recipient engaged in exempted supplies or unregistered etc.,). Thus, there is very less chance for revenue leakage. Hence, the rationale of the old laws attempts to tax the free supplies would not hold water under GST and may run against the objective of GST to a

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o a component manufacturer (the two not being related persons or distinct persons) on FOC basis does not constitute a supply as there is no consideration involved. Further, since the moulds and dies are provided on FOC basis by the OEM to the component manufacturer in the course or furtherance of his business, there is no requirement for reversal of input tax credit availed on such moulds and dies by the OEM. 1.2 It is further clarified that while calculating the value of the supply made by the component manufacturer, the value of moulds and dies provided by the OEM to the component manufacturer on FOC basis shall not be added to the value of such supply because the cost of moulds/dies was not to be incurred by the component manufacturer and thus, does not merit inclusion in the value of supply in terms of section 15(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act for short). 1.3 However, if the contract between OEM and component manufacturer was for supply of component

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Goods and Services Tax – Classification of supply – The printed advertisement materials manufactured and supplied by the applicant are classifiable as supply of goods – classifiable under chapter head

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Goods and Services Tax – Job-work activity or not? – The activity of manufacturing industrial gases viz. Oxygen, Nitrogen and Argon undertaken by the applicant amounts to ‘Job Work’ as defined under S

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Goods and Services Tax – Valuation – Job work – The value of supply by the applicant shall be the transaction value, which is the price actually paid or payable for the said supply as Job Charges, in

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Goods and Services Tax – Classification of goods – Supply under GST – The product ‘Electrically operated Drum with Bell and Zalar’ manufactured and supplied by the applicant is classifiable under Head

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Goods and Services Tax – Classification of goods – Power Driven Pumps used for dispensing an exact nature of water such as clear, raw, storm, waste or sewerage – would not be eligible for Goods and Se

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Goods and Services Tax – The product ‘Geared Motor’ is classifiable under Chapter Heading 8501 of the Customs Tariff Act, 1975 and Goods and Services Tax rate applicable to Chapter Heading 8501 is app

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REGARDING CLARIFICATION ON REFUND IN GST – GST – States – Circular No. 1819016/315 – Dated:- 12-6-2018 Circular – Trade Notice – Public Notice – Instructions – Office orders

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2018 (7) TMI 321 – CESTAT KOLKATA – TMI – Penalty u/s 11AC – fraudulent availment of CENVAT credit – fake invoices without actual receipt of goods – paper transactions – Held that:- It is evident from the record that the Assessee reversed the credit availed on the basis of the invoices issued by the two supplier companies. It was found that the credit was availed on the basis of the invoices without actual receipt of the goods. Apparently, fact of reversal of credit is linked with non-receipt of the inputs and no other conclusion can be drawn – the Order of the Commissioner (Appeals) regarding the setting aside of the penalties cannot be sustained.
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The Tribunal in the identical situation in the case of M/s. Steel Centre [2017 (9) TMI 1251 – CESTAT KOLKATA] upheld the demand of CENVAT Credit along with interest and imposition of penalty on the assessee and reduced the penalties on the co-noticees.
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Penalty imposed on M/s. Bindawala Cables & Conductors Limited is upheld subje

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that the assessee had availed CENVAT Credit wrongly on M.S. Wire/ Wire Rod showing the purchase of the said goods under the invoices issued by M/s. Kritika Wires Private Limited, M/s. Shivam India Limited without receiving the inputs in their factory. After thorough investigation, a Show Cause Notice dated 16.09.2015 was issued proposing denial of CENVAT Credit along with interest and to impose penalty on the assessee and other persons. The Adjudicating authority disallowed the CENVAT Credit of ₹ 20,18,930/- alongwith interest against the assessee and also imposed penalty of equal amount of CENVAT Credit on the assessee, Respondent No. 1 herein. It has also imposed penalty of equal amount of CENVAT Credit on M/s. Bindawala Electricals Industries Limited and penalty of ₹ 20,18,930/- on Shri Bhagwan Das Bindawala, Director of the Assessee Company, penalty of ₹ 18,12,724/- on M/s. Kritika Wires Private Limited and penalty of ₹ 2,06,206/- on M/s. Shivam India Limite

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tral Excise, Patna vide Order No. FO/77411- 77415/2017 dated 21.09.17 upheld the penalty on the assessee and also reduced the amount of penalty on the co-appellants. 3. The Learned Counsel for the Respondents submitted that the assessee placed Orders for M.S. Wire Rods to various Manufacturers/Sellers, M/s. Kritika Wires Private Limited and Shivam India Limited and the payments were made. The goods were received between September 2010 to March 2011 in a routine manner and the goods were received in their factory and utilized in the manufacture of final products. It is submitted that the assessee found M.S. Wire Rods unviable for M.S. Wire production and the credit taken on the goods before utilization was reversed by them on 31.03.2011. Thereafter, the Central Excise Audit party on or around 17.04.2013 raised the dispute of wrongful availment of credit. It is submitted that the Commissioner (Appeals) rightly set aside the penalties as the Revenue failed to produce any evidence of non r

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n my considered view, it is not necessary to go on this issue as the Noticee had already reversed the credit. The case of the Revenue is that the assessee availed the credit in a fraudulent manner and therefore imposition of penalty is warranted under the provisions of Section 11AC of the Central Excise Act. 7. I find that the Commissioner (Appeals) set aside the penalty that there is no evidence produced by the Revenue to substantiate the fact that the assessee has procured the inputs from elsewhere. It is observed that the allegation of the Revenue, that the assessee was not entitled to avail the CENVAT Credit, since they have only resorted to paper transaction without actual receipt of the impugned goods, to be devoid of merit. The Commissioner (Appeals) proceeded on the basis that the assessee reversed the credit before the issuance of the Show Cause Notice and therefore there was no mala fide intent on the part of the assessee. I am unable to accept such findings of the Commission

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received by MCU. Further, the payments for the same had been made by MCU by Account Payee Cheque or through RTGS. It has also been argued that some of the registration numbers of the vehicles indicated in the consignment notes might have been recorded by mistake. 5) It has been argued on behalf of the BSC that penalties may not be imposed on BSC as well as on the partner Shri Bimal Kr. Kheria. 6) The CENVAT Credit availed by MCU on the basis of invoices issued by BSC as well as M/s. Steel Centre. The goods from BSC as well as Steel Centre have been claimed to be transported by UFC and have been accompanied by their consignment notes but the investigation undertaken at the end of UFC has established, through the statement of Shri Bithal Agarwal, that UFC has never undertaken transportation of goods covered by the invoices, issued by the two suppliers. It has been admitted that the consignment notes have been issued only in return of 2% commission. Further, the Department undertook verif

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o be disallowed. 9) We find that a similar issue of fraudulent CENVAT Credit availment on the invoices issued by first stage dealers came up before the Mumbai Bench of the Tribunal in the case of Bhagwati Steel Casts Ltd. Vs. CCE, Nasik [2013 (293) ELT 417 (Tri-Mumbai) in which Tribunal, vide three Member Bench decision, upheld the order and disallowed the CENVAT Credit on the basis of dealer s invoices which were accompanied by consignment notes in which vehicle numbers were found to be incapable of transporting goods. The above decision is also followed by the Tribunal in the final order No. of Ankit Exim Pvt. Ltd. & others Vs. CCE, New Delhi in final order No. 53839- 53841/2017-Ex [DB] dated 09.06.2017. 10) In view of the above discussions, recovery of CENVAT Credit alongwith interest as well as penalty of ₹ 1,16,03,673/- imposed against MCU, are upheld. 11) We conclude that the CENVAT Credit availed by MCU on the basis of such fraudulent invoices issued by the two dealers

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s of the case and the ratio of the case laws, the imposition of penalty on Shri Bhagwan Das Bindawala, Director of the Assessee is required to be set aside. However, the Respondents namely M/s. Bindawala Electricals Industries Ltd and M/s Kritika Wires Pvt. Ltd. were involved in the offence and facilitated the assessee to avail the irregular Cenvat Credit in a fraudulent manner and therefore the imposition of penalty is justified. In view of the above discussion, the impugned Order passed by the Commissioner (Appeals) is modified as under:- i) Penalty imposed on M/s. Bindawala Cables & Conductors Limited is upheld subject to the option of payment of 25% of duty within 30 days under Section 11AC would be allowed. ii) Penalty imposed on Shri Bhagwandas Bindawala is set aside. iii) Penalties imposed on M/s. Bindawala Electricals Industries Ltd. and M/s. Kritika Wires Pvt. Ltd. are reduced to ₹ 2 Lakhs each. 8. All the appeals as filed by the Revenue are disposed off in the above

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GST – States – 24/2018-STATE TAX – Dated:- 12-6-2018 – GOVERNMENT OF JHARKHAND COMMERCIAL TAXES DEPARTMENT NOTIFICATION NO.24/2018-STATE TAX [S.O. NO.42] (F.NO. VAKAR/GST/03/2018) DATED 12-6-2018 In exercise of the powers conferred by section 48 of the Jharkhand Goods and Services Tax Act, 2017 (12 of 2017) read with sub-rule (3) of rule 83 of the Jharkhand Goods and Services Tax Rules, 2017, the Commissioner, on the recommendations of the Council, hereby notifies the National Academy of Custo

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GST – States – G.O.Ms. No.115 – Dated:- 12-6-2018 – GOVERNMENT OF TELANGANA COMMERCIAL TAXES DEPARTMENT TGST NOTIFICATION G.O.Ms. No.115 DATED 12-6-2018 In exercise of the powers conferred by Section 128 of the Telangana Goods and Services Tax Act, 2017 (Act No. 23 of 2017), the State Government, on the recommendations of the Council, hereby waives the late fee payable under section 47 of the said Act for failure to furnish the return in FORM GSTR-3B by the due date for each of the months from

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2018 (6) TMI 1249 – CESTAT NEW DELHI – TMI – Reversal of CENVAT credit – writing off of raw materials/packing materials – case of Revenue is that admittedly the order of the Assistant Commissioner, in the operative part, has nowhere specified dropping of the demand in respect of reversal of Cenvat credit in respect of written off of raw materials and packing list – Held that:- The adjudicating authority, may verify the figures again. If according to the ld. Advocate, the figures are correct, the adjudicating authority would pick up the same figures again and there is no harm in verification of the same – It is also a fact that in the operative part of the order, the original adjudicating authority has not referred to dropping of demand. In such a scenario, I deem it fit to uphold the impugned order of Commissioner (Appeals) vide which he has remanded the matter for fresh verification of the figures.
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Penalty – Held that:- It is not a case of any mala fide and the said demand stan

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demand on the said count by observing that the assessee had reversed the appropriate Cenvat credit. However, the original adjudicating authority confirmed the demand to the tune of around ₹ 14,359/- on the calculation basis along with imposition of penalty. 3. The said order was appealed against by the Revenue as also by the assessee before Commissioner (Appeals). While disposing of the Revenue s appeal, Commissioner (Appeals) observed that the Assistant Commissioner had not verified the factual position and has not properly quantified the reversal. He also observed that in the operative part of the order, the original adjudicating authority has not mentioned about the dropping of the demand, which renders the same as a non-speaking order. Accordingly, he remanded the matter on the said count for re-verification. As regards, the assessee s appeal, he upheld the duty confirmation to the extent of ₹ 14,359/- along with penalty. The said order of the Commissioner (Appeals) is

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off of raw materials and packing list. He submits that even if the Assistant Commissioner has gone by the report by the Supdt., the assessee is not at a disadvantageous position if the said figures are again verified. 6. After considering the submissions made by both the sides, I agree with the ld. AR that the adjudicating authority, may verify the figures again. If according to the ld. Advocate, the figures are correct, the adjudicating authority would pick up the same figures again and there is no harm in verification of the same. It is also a fact that in the operative part of the order, the original adjudicating authority has not referred to dropping of demand. In such a scenario, I deem it fit to uphold the impugned order of Commissioner (Appeals) vide which he has remanded the matter for fresh verification of the figures. 7. As regards the demand of ₹ 14,359/-, the appellant had not contested the same and the only challenge is to imposition of penalty. I agree with the ld.

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Goods and Services Tax – Started By: – Ravikumar Doddi – Dated:- 11-6-2018 Last Replied Date:- 12-6-2018 – Dear sir, Some of the input tax was missed out to claim in 3b return for the month of 2018, As per Section 16(4) of CGST Act provides maximum time limit was prescribed to claim missed out ITC not later than furnishing of the return for the month of Sept following the end of financial year or furnishing of the relevant annual return which ever earlier, I found the missed out ITC of March in the month of June2018 can claim in June2018 return ITC belong to March 2018 or should I claim in annual return which is scheduled to in Dec. Pl clarfiy, If I claim the missed out purchcase belong to March in the month of June2018 it is again a misma

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Goods and Services Tax – Started By: – Thevarkonda Suresh – Dated:- 11-6-2018 Last Replied Date:- 11-6-2018 – sir One my client has done interior decorators for ITC Company (Food Division namely Atta etc), Client Charged 18% on the value and ITC company has replied to refer Notification 11/2017 dt 28/06/2017 for which 12% is applicable. My question is that rate of GST applicable whether it is 12% or 18% Pls reply sir T S Suresh – Reply By Rajagopalan Ranganathan – The Reply = Sir, Date of Notif

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Service Tax – Started By: – BHAKTIKANT BHATT – Dated:- 11-6-2018 Last Replied Date:- 11-6-2018 – SIR,WHETHER WE TAKE IGST CREDIT ON 5% IGST PAID ON OCEAN FREIGHT PAID ON CIF PURCHASE VIDE NOTIFICATION NO 10/2017.EXCISE AUDITOR DENY TO TAKE IGST CREDIT WHICH WE PAID ON OCEAN FREIGHT.KINDLY GIVE US YOUR VALUABLE SUGGESTION.Thanks – Reply By Rajagopalan Ranganathan – The Reply = Sir, First please clarify whether ocean freight is paid in respect of imported goods or exported goods. Vide Sl. No. 9(ii) of Notification No. 8/2017-Integrated Tax (Rate) dated 28.6.2017 as amended, in respect of transport of goods in a vessel including services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-

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Goods and Services Tax – Classification of Supply – supply of solar power generating system – Turnkey EPC Contract – split contract for supply of goods and supply of services may not be valid – artifi

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Goods and Services Tax – Agricultural Soil testing Minilab and its Reagent Refills are classifiable under Tariff heading 9027 of the GST Tariff and tax rate applicable is 9% CGST +9% SGST. – TMI Updates – Highlights

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Goods and Services Tax – Concessional Rate of GST – supply of goods like scientific and technical instruments – The goods intended to be supplied by the applicant to M/s SDSC are not covered under Not

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Goods and Services Tax – Works Contract Services (WCS) provided by the sub-contractor to the main contractor; providing WCS to Central Government, State Government, Union territory, a local authority,

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Goods and Services Tax – Maintainability of Advance Ruling Application – Transitional Credit – Input Tax Credit – Clean Environment (Energy) Cess – The question sought do not fall under the ambit of S

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Goods and Services Tax – Determination of rate of tax – pharmaceutical products (i.e. Bulk drugs and Intermediates) – The applicant is eligible to claim the benefit of lower rate of GST i.e., 5% – TMI Updates – Highlights

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Goods and Services Tax – GST on cold storage operations for agricultural products – The storage and warehousing of Agriculture produce falls under Service Account Code (SAC) 9986 and not under 9967 –

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Goods and Services Tax – Classification of goods – Polished/Processed limestone slabs – Polished/Processed limestone slabs are correctly classifiable under heading 6802 of the GST Tariff. – TMI Updates – Highlights

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GST – States – 13/2018 – Dated:- 11-6-2018 – Government of India, Ministry of Finance, Department of Revenue Office of the Chief Commissioner, Goods and Services Tax & Customs Crescens Building, M.G Road, Shillong. 793001 Fax Nos. 91-0364-222474712502047. Email: ccshillo@excise.nic.in Trade Notice No. 13/2018 Dated, Shillong the 11th June 2018 Subject: Clarifications on certain issues under GST-reg. The Central Board of Indirect Taxes & Customs has issued a Circular No. 47/21/2018-GST dated 8th June, 2018 for the Trade and as well as all concerned regarding clarifications on certain refund related issues. 2. Representations have been received seeking clarification on certain issues under the GST laws. The same have been examined and the clarifications on the same are as below: Sl.No. Issue Clarification 1. Whether moulds and dies owned by Original Equipment Manufacturers (OEM) that are sent free of cost (FOC) to a component manufacturer is leviable to tax and whether OEMs are

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d Services Tax Act, 2017 (CGST Act for short). 1.3 However, if the contract between OEM and component manufacturer was for supply of components made by using the moulds/dies belonging to the component manufacturer, but the same have been supplied by the OEM to the component manufacturer on FOC basis, the amortised cost of such moulds/dies shall be added to the value of the components. In such cases, the OEM will be required to reverse the credit availed on such moulds/ dies, as the same Will not be considered to be provided by OEM to the component manufacturer in the course or furtherance of the former's business. 2. How is servicing of cars involving both supply of goods (spare parts) and Services (labour), where the value of goods and services are shown separately, to be treated under GST? 2.1 The taxability of supply would have to be determined on a case to case basis looking at the facts and circumstances of each case. 2.2 Where a supply involves supply of both goods and servic

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nd an auctioneer may also comply with the said provisions. (b) The principal and the auctioneer for the purpose of auction of tea, coffee, rubber etc., or the principal and the auctioneer for the purpose of supply of tea through a private treaty, are required to maintain the books of accounts relating to each and every place of business in that place itself in terms of the first proviso to sub-section (1) of section 35 of the CGST Act. However, in case difficulties are faced in maintaining the books of accounts, it is clarified that they may maintain the books of accounts relating to the additional place(s) of business at their principal place of business instead of such additional place(s). (c) The principal and the auctioneer for the purpose of auction of tea, coffee, rubber etc., or the principal and the auctioneer for the purpose of supply of tea through a private treaty, shall intimate their jurisdictional officer in writing about the maintenance of books of accounts relating to t

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o a SEZ unit or vice versa located in the same State. (i) It may be noted that e-way bill generation is not dependent on whether a supply is inter- State or not, but on whether the movement of goods is inter-State or not. Therefore, if the goods transit through a second State while moving from one place in a State to another place in the same State, an e-way bill is required to be generated. (ii) Where goods move from a DTA unit to a SEZ unit or vice versa located in the same State, there is no requirement to generate an e- way bill, if the same has been exempted under rule 133(14)(d) of the CGST Rules. This Trade Notice is being issued so as to sensitize the trade and field formations about the contents of the aforesaid references and for complete details, the respective references may please be referred in the CBIC's website www.cbec.gov.in. All Commissioners are requested to bring the contents of the Trade Notice to the notice of all the officers working under their charge and t

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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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