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2019 (10) TMI 615 - AAR - GSTCommission Agents - Dry Chilly - agriculture produce or not - service of supplying dry chillies on behalf of farmers to the traders - issue sale patties to the agriculturist principals. - section under which registration required - Rate of GST - Benefit of exemption - HSN Code for Dry Chilly. HELD THAT:- It is an admitted fact that the Applicant is a commission agent involved in the business of receipt of dry chillies from the farmers (principals) and supply of the same to the buyers/traders, on behalf of farmers in the Byadgi A.P.M.C. Market, Karnataka. They are registered under the APMC Act & also under the GST Acts. They sell goods (dry chillies) on behalf of principals to the traders, issue invoices to the traders/buyers as prescribed under the APMC Act and also issue sale patties to the principals. They collect commission, on the services provided to the principals, from the purchasers / buyers and the same is also shown in the invoice issued to the purchasers. Whether the applicant qualifies to be an agent in terms of para 3 of Schedule I to CGST Act and also whether the applicant is involved in taxable supply or not? - HELD THAT:- In the instant case the applicant sells the goods i.e. dry chillies on behalf of the principal, issues invoice to the buyer/trader in his own name, receives commission as per APMC Act of the State of Karnataka. Therefore the applicant has the authority to pass the title of the goods on behalf of the principal to the buyer, as the invoice is raised in their own name and hence qualifies to be an 'agent' in terms of para 3 of Schedule I to the CGST Act and also in terms of definition under Section 2(5) of CGST Act 2017. Whether the applicant is involved in making taxable supply or not? - HELD THAT:- In the instant case the principal i.e. farmer is not a taxable person and hence the applicant is not involved in supply of goods of another taxable person (farmer). Therefore the applicant does not fall under the category of persons to be compulsorily registered under Section 24(vii) of the CGST Act 2017. However the applicant is liable to get registered under Section 22(i) of the CGST Act 2017. Whether dry chilli qualifies to be 'agricultural produce' or not? - HELD THAT:- In the instant case the dry chillies are produced out of plants and are used for food or as raw materials and is a product obtained by drying the chillies to make it marketable for the primary market and this process does not alter its essential characteristics. Hence dry chillies are covered under the term “agricultural produce”. Even the APMC Act considers them as agricultural produce - the Applicant is involved in provision of exempted supply of services to the farmers for sale of dry chillies, an agricultural produce, in terms of entry no. 54(g) of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017.
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