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2022 (2) TMI 777 - AAR - GSTExemption from GST - seeds received, processed, packed and returned by the Applicant, as job worker, as seeds for sowing are 'agricultural produce' - exemption under N/N. 12/2017- Central Tax (Rate) dated 28-06-2017 and 11/2017- Central Tax (Rate) dated 28-06-2017 - storage of the seeds in the storage facility/godowns, loading, unloading and packing of the seeds (heading No.9986) by the applicant, job worker on job work basis - Applicability of Sl. 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 (Rate)dated 28-06 2017 - rocesses, namely, cleaning, drying, grading and treatment with chemicals (heading No.9986), carried out by the applicant, job worker on job work basis - exemption under Sl.No.54(c) and (h) of the Notification No. 12/2017- Central Tax (Rate) dated 28-06-2017 read with the definition of "agricultural produce" thereunder and Sl.No.24(1)(c), (h) and (iii) of the Notification No. 11/2017- Central Tax (Rate)dated 28-06-2017. 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. Supply of seed does not fall under the definition of agricultural produce as the seed does not fulfill the utilities prescribed therein - Similarly the said definition restricts the ‘agricultural produce’ to unprocessed goods. Further even if ‘processing’ is done it should be ‘such processing’ as done by a ‘cultivator’ for ‘primary market’. Essentially processed agricultural products do not fall under this definition. If any processing is done it should be on an equal footing to that done by a “cultivator for primary market” i.e., processing made by a farmer for agricultural mandi. Even if the farmer does any different processing such produce will not fall under this definition. 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; and b. Serial No. 24(i)(e) 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. 2. Cleaning, drying, grading and treatment with chemicals carried out by a job worker or on job work basis are not exempt under: a. Serial No. 54(c)(h) 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)(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.
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