TMI Blog2018 (7) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... ) etc. or like goods brought to them for cleaning process - As per Entry no. 24(i)(i) of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and the Entry No. 54(c) of the Notification No. 12/2017 Central tax (Rate) dated 28/06/2017 NIL rate of GST is provided on those processes which are carried at Agriculture Farm and which do not change the essential characteristics of the Agricultural Produce but only make it marketable for primary market .i.e. first marketability. It limits the processing only to that extent which makes it marketable for primary market. Hence all other processes which are done after acquiring the stage of first marketability fall outside the scope of above clause - Secondly and most importantly processes undertaken on agricultural produce such as 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, should be carried out at Agricultural Farm i.e. all given processes must necessarily be undertaken at Agriculture Farm only then it would attract NIL rate under GST. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11/2017 Central tax (Rate) dated 28/06/2017 attracting NIL rate of tax: 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 (ii) S. No. 24(i)(iii) of Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 attracting NIL rate of tax: Carrying out an intermediate production process as job work in relation 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. (iii) Entry S. No. 54(c) of Notification No 12/2017 -Central Tax (Rate) dated 28/6/17: (c) process es 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28/06/2017 and Entry No. 54(c) of Notification No 12/2017 -Central Tax (Rate) dated 28/6/17 attracting NIL rate of duty. 5. Further the point 4.4.6 alternatively also clarifies Shelling of paddy would not be covered in the negative list entry relating to agriculture as this process is not done on a farm but in a rice shelling unit normally located away from the farm. However, if shelling is done by way of a service i.e. on job work then the same would be covered under the exemption relating to 'carrying out of intermediate production process as job work in relation to agriculture'. Applying the ratio cleaning activity done by the applicant firm may be treated as intermediate production process as job work in relation to agriculture produce. Therefore, alternatively activity of cleaning may also be covered by Entry No. S. No. 24(i)(iii) of Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and Entry No. 55 of Notification No 12/2017 -Central Tax (Rate) dated 28/6/17 attracting NIL rate of duty. 6. That Section 66(D), 65(B) of the Finance Act 1994 and the relevant extracts from the Education guide on the Service Tax is reproduce below clari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ension means application of scientific research and knowledge to agricultural practices through farmer education or training; (5) agricultural produce means any produce of agriculture 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; [Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017] Rate of GST on intra-State supply of specific services with Service Code Tariff (SAC) In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government , on the recommendations of the Council , and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax , on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce. Nil - (ii) Support services to mining, electricity, gas and water distribution. 9 - 4. Explanation.- For the purposes of this notification, - (i) Goods includes capital goods. (ii) Reference to Chapter , Section or Heading , wherever they occur, unless the context otherwise requires, shall mean respectively as Chapter, Section and Heading in the annexed scheme of classification of services (Annexure). (iii) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of heading 9988. (iv) Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that.- (a) credit of input tax charged on goods or services used ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponding entry in column (5) of the said Table, namely:- TABLE (1) (2) (3) (4) (5) SI. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Service Rate (percent.) Condition 54 Heading 9986 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 marketa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the applicant (as discussed at pt. 15 below) covered by Entry S. No. 54(c) or Entry No. 55 of Notification No 12/2017 -Central Tax (Rate) dated 28/6/17 attracting NIL rate of tax. Personal Hearing (PH) In the matter personal hearing was given to the applicant and accordingly Shri Alok Kumar Kothari, Advocate, appeared as representative of applicant for personal hearing on 11.05.2018. During the PH he reiterated the submissions already made in the application for Advance Ruling submitted on 27.03.2018.. He requested that the case may be decided as per the above submission made earlier. FINDINGS : 1. The Jurisdictional Officer in his/her comments has stated that the activity of cleaning is not being carried out at agriculture farm but at special cleaning plant installed away from agricultural farm .Further it is stated that cleaning activity cannot be defined as intermediate production process as job work in relation to cultivation of plants, hence are not covered under NIL rate of tax. 2. Applicant M/S Rara Udyog, Jaipur has a cleaning plant installed at E-144. RIICO Industrial Area Bagru . Jaipur and undertakes removing of various impurities from various pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55 of the Notification No. 12/2017 Central tax (Rate) dated 28/06/2017 Nil Rate of GST is provided on Carrying out an intermediate production process as job work in relation 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. 9. The activity of mechanized cleaning does not fall under intermediate production process as job work in relation to cultivation of plants. Intermediate production process as job work in relation to cultivation of plants usually relates to agricultural operations directly related to production of any agricultural produce such as cultivation, harvesting, threshing, plant protection, testing, and supply of farm labour etc., carried out at agricultural farm. Hence the activity of mechanized cleaning at an installed plant is not covered under the above clause too and does not attract NIL rate of Tax. 7. In view of the foregoing, we rule as under, RULING The activity of the applicant i.e. M/s Rara Udhyog, Jaipur is not covered by Entry S. No. 24 (i)(i)(c) or S. No. 24(i)(iii) of Notification No. 11/2017 Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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