Man power supply to Poultry Farm - Taxable or exempt, Goods and Services Tax - GST

[Venkatesh Dhongadi]

Sirs,

Man power supply to Poultry Farm is Taxable or Exempt as per SAC 9986 i.e., Support services to agriculture, Forestry, Fishing, Animal Husbandry. Thank you.

Posts / Replies

[Amit Agrawal]

Your attention is invited to Serial Number 54 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as amended till date wherein following services following under 'HSN / SAC Code '9986' is exempted from GST:

"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 bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market;

(d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use

(e) loading, unloading, packing, storage or warehousing of agricultural produce;

(f) agricultural extension services;

(g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce"

Your attention is also invited to the following definition given in above-said notification: “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;

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Venkatesh Dhongadi]

Thanks for your valuable suggestion sir. But there is some change in my query. Here man power supply is given to chicken factory. Labours are paid on hourly basis for processing Live chicken to chicken pieces, packing & other process. Whether this service will fall under SAC 9986.?

[KASTURI SETHI]

Dear Querist,

(i) With the change of your query, the whole scenario has changed. Your service is covered under HSN 9985.

9985 Support services

99851 Employment services including personnel search/referral service and labour supply service

This group includes personnel search/referral service and labour supply service; provision of labour services to clients through a variety of types of contracts like Contract staffing services, Temporary staffing services, Long-term staffing (payrolling) services, Temporary staffing-to-permanent placement services, and Co-employment staffing services

(ii) Not eligible for exemption. Manpower supply is not meant for agriculture produce. Out of definition of 'Agriculture Produce'. Manpower supply is not related to rearing of 'LIFE FORMS' of animals but related to 'DEAD FORM' of animals.

(iii) Rate of tax is 18%.

[Amit Agrawal]

Dear Querist,

With regards to 'changed factual scenario', exemption from GST vide serial Number 54 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as amended till date is NOT available irrespective of classification of your services. 

'Poultry Farms' and 'Chicken Factory' are two completely different things. And this cannot be called as merely "some change" in your initial query. 

And, exemption under serial Number 54 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as amended till date is not solely dependent of HSN / SAC of services provided by you. 

For getting exemption from GST under above-said entry, your services must fulfil 'description of services' given in "column (3)" of the Table against above-said serial No. 54 and your services (in the changed factual scenarios) do not fulfil the same. 

Please also note 'Explanation 3(ii) from above-said notification which states that 'Chapter, Section, Heading, Group, or Service Code mentioned in Column (2) of the Table are only indicative'. 

As classification of services can be dependent upon the 'terms, conditions & responsibilities  of the contract entered' which I am not privy to, I do not wish to comment of exact classification of services so provided by you. This is more so when exact classification of your services is irrelevant for claiming exemption under above-said Serial No. 54. 

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Ganeshan Kalyani]

Exempt is not available on labour supply to chicken processing factory. It is not an agricultural  or farm related work.

[Venkatesh Dhongadi]

Thank you your valuable suggestions Amit Sir and K Sethi Sir. Regrets for my initial wrong query.