TMI Blog2022 (2) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... transport of seeds from the farm lands to storage facility/godown of the applicant, transport of seeds from one storage facility/godown of the applicant to the other storage facility/godown of the applicant, transport of packed seeds from storage facility/godown of the applicant to the distributor and transport of sales-returns, if any, (heading No.9965 or 9967) - Sl.No. 21(a) of the Notification No. 12/2017- Central Tax (Rate)dated 20-06-2017 - processes undertaken by the applicant, namely, cleaning, drying, grading, treatment with chemicals and packing (heading No.9986), for himself - supply or not - HELD THAT:- The applicant is supplying goods which are produce of cultivation of plants. However they are of seed quality and not grain, therefore further they are not meant for food, fibre, fuel or raw material for further processing. In the definition of agricultural produce, the word raw material is used which is a general word and is in the company of specific words i.e., food, fibre and fuel. These specific words indicate direct consumption by human or in industry but not in cultivation. The Hon ble Supreme Court of India in the case of GODFREY PHILLIPS INDIA LTD. AND ANOT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged by a cultivator or an agriculturalist and not to services engaged by Seed Company; b. Serial No. 24(i)(c) (h) of Notification No. 11/2017 as this entry pertains to support services to agriculture, forestry, fishing, animal husbandry engaged by a cultivator and not to services engaged by a seed company. 3. Transportation of seeds from farm to storage facility and then transportation of packed seed from storage facility to distributors is not exempt under: a. Serial No. 21(a) of Notification No.12/2017, as this entry provides exemption on transportation services to agricultural produce and from the foregoing discussion it is established that seed is not agricultural produce in terms of the definition used in the notification, the transportation services engaged by a seed company are not exempt. 4. If processing is undertaken by an applicant himself for in house seed production, there is no supply and hence exempt. - A.R.Com/30/2021 TSAAR Order No.05/2022 - - - Dated:- 11-2-2022 - SRI B. RAGHU KIRAN, IRS, AND SRI S.V. KASI VISWESWARA RAO, MEMBER [ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF THE TEALANGAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2017- Central Tax (Rate)dated 28-06 2017 and Sl.No.24(1)(e) of the Notification No. 11/2017- Central Tax (Ret)dated 28-06-2017 or any other entry/entries of the above notifications. 3. Whether the processes, namely, cleaning, drying, grading and treatment with chemicals (heading No.9986) carried out by the job worker on job work basis are exempt from payment of GST in terms of Sl.No.54(c), (h) of the Notification No. 12/2017- Central Tax (Rate)dated 28-06-2017 read with the definition of agricultural produce there under and Sl.No.24(1)(c), (h) and (ill) of the Notification No. 11/2017- Central Tax (Rate)dated 28-06-2017 read with the definition of agricultural produce thereunder or any other entry/entries of the above notifications. 4. Whether the transport of seeds from the farm lands to storage facility/godown of the applicant, transport of seeds from one storage facility/godown of the applicant to the other storage facility/godown of the applicant, transport of packed seeds from storage facility/godown of the applicant to the distributor and transport of sales-returns, if any, (heading No.9965 or 9967) is exempt from payment of GST in terms of Sl.No. 21(a) of the Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 02/2017 dated: 28.06.2017 wherein exemption is accorded to all goods of seed quality . Clearly GST law also makes a distinction between grain and seed, therefore even if grain is taxable it will be exempt if it is of seed quality. For example: Serial No. 65 of Notification No. 01/2017 clearly states that tax can be levied @5% on Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken other than of seed quality. Thus groundnut is taxable in grain form and not in seed form. Hence seed and grain are not one and the same. The law applicable to grain and seed will be different and therefore concessions applicable to grain produced by a cultivator will not be applicable to seed. Now coming to the definition of agricultural produce at item 2(d) of Notification No. 12/2017 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... farmer does any different processing such produce will not fall under this definition. The facts presented by the applicant clearly indicate that the processing done by them to turn grain into seed quality goods is different from the processing done by a cultivator or producer of grain for primary market i.e., agricultural mandi or agricultural market yard. Therefore even on this count, the seed quality goods produced by them cannot be treated as agricultural produce. Therefore the seeds produced by them do not qualify as agricultural produce and hence: 1. Storage of seeds in the storage facility/godown, loading/unloading and packaging by job worker are not exempt under: a. Serial No. 54E of Notification No. 12/2017 as this entry pertains to 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. This entry relates to exemption of services engaged by a cultivator or an agriculturalist and not to services engaged by Seed Company. b. Serial No. 24(i)(e) of Notification No. 11/2017 as this entry pertains to support servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.54(e) of the Notification No. 12/2017- Central Tax (Rate)dated 28-06 2017 and Sl.No.24(1)(e) of the Notification No. 11/2017- Central Tax (Ret)dated 28-06-2017 or any other entry/entries of the above notifications. Not exempt as discussed above. 3) Whether the processes, namely, cleaning, drying, grading and treatment with chemicals (heading No.9986) carried out by the job worker on job work basis are exempt from payment of GST in terms of Sl.No.54(c), (h) of the Notification No. 12/2017- Central Tax (Rate)dated 28-06-2017 read with the definition of agricultural produce there under and Sl.No.24(1)(c), (h) and (ill) of the Notification No. 11/2017- Central Tax (Rate)dated 28-06-2017 read with the definition of agricultural produce thereunder or any other entry/entries of the above notifications. Not exempt as discussed above. 4) Whether the transport of seeds from the farm lands to storage facility/godown of the applicant, transport of seeds from one storage facility/godown of the applicant to the other storage facility/godown of the applicant, transport of packed seeds from storage facility/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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