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2021 (1) TMI 335 - AAR - GSTExemption from GST or not - Fumigation service provided in a warehouse of agriculture produce - applicability of Entry No. 54 of Not. No. 12/2017-CT (Rate) dated 28.06.2017 - Classification of Fumigation of such services - classified under Service Accounting code 998531 or not - liability of tax. HELD THAT:- The applicant is providing service of pest control that completely fills an area with gaseous pesticides of fumigants to suffocate or poison the pests within the area of fumigation. The fumigation is utilized for control of pests in Grain and produce and it is also used during the processing of goods to be imported or exported to prevent transfer of exotic organism. The applicant provides fumigation service to their clients as per their requirements in factory premises, in warehouse premises may be stored Agri and non agri products. The applicant further submitted that they have order from their client to Fumigation Services in a bonded/ customs warehouse of Food Grain, Pulses and similar to the agri products and such Agri produce stored in a warehouse may be imported or Exported produced - As per the Entry No. 54 (h) of Notification No. 12/2017-CT (Rate) dated 28.06.2017 as amended Services by way of fumigation in a warehouse of agriculture produce are not liable to Goods and Service Tax. It means that service of fumigation provided to agriculture produces stored in a warehouse are exempted from payment of GST. The term ‘primary market’ is not defined in the GST Act. It is understood in common parlance as a platform or a place, like a mandi, where the farmers are directly selling to the buyers, including the wholesalers, mills, food processing units, exporters, etc. It appears that services relating to the cultivation of plants include support services as may be required till the farmer disposes the agricultural produce in the primary market. All services and processes beyond the realm of the primary market are excluded. In the custom bonded warehouse agri produce stored for export do not cover under the definition given under explanation 2(d) of Notification No. 12/2017-CT (Rate) dated 28.06.2017. Further, in absence of any facts on the records it cannot be concluded that the custom bonded warehouse are used exclusively only for storage of agriculture produce and are not used for storage of non agriculture produce. Further it is observed that applicant in his application has submitted that in the custom bonded warehouse imported agri produce are also stored. The imported produce has been procured from the farmers in the foreign and exported to India. Clearly, it is, whether processed in a mill, no longer in the domain of the primary market or at the farmer’s hand - the fumigation service provided by the applicant in custom bonded warehouse where in exported and imported agriculture produce are stored is not covered under Sl. No. 54(h) of the Exemption Notification No. 12/2017-CT (Rate) dated 28.06.2017, therefore, applicant service is liable to GST. The service of fumigation/pest control in warehouse provided by the applicant is merit classification under Service Accounting Code (SAC) 99853. In view of the entry No 23(ii) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 the rate of GST for the service of fumigation/pest control provided in a warehouse of agriculture produce would be 18%.
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