TMI Blog2018 (7) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... e, forestry, fishing, animal husbandry” is exempt - Once the products attains its first marketability for the primary market all other subsequent processes on produce leading to value addition and subsequent sale belong to the realm of secondary market thereon refraining the produce to fall under the category of ‘Agricultural Produce’ as defined in Notification. Goods as per annexure A (Group A to G) are discussed as follows:- Annexure A (Group A) - Fennel(Saunf), Coriander(Dhaniya), Cumin Seeds (Jeera), Carom Seeds(Ajwain) ,Fenugreek Seeds(Kasoori Methi),Mustard Seeds(Sarson),Bn)vvn Mustard Seeds (Rai),.Nigella Seeds(Kalonji),Poppy Seeds(Posara Dana) - Held that:- If no further processing is done on above mentioned goods or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes marketable for primary market .then the same would fall in the definition of agricultural produce given in aforesaid Notification and exemption would be available. Annexure A (Group B) - Turmeric (Haldi), Dried Ginger (Sonth) - Held that:- Processed goods mentioned in Group B do not belong to produce which are being sold i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt from the levy of GST . However if any processing is done on these products as is not usually done by a cultivator or producer at farm level , then these would fall outside the definition of agricultural produce as given in the aforesaid Notification and in that cast-supply of cold storage service in relation to these would remain chargeable to GST. Goods mentioned under Group B to G are not Agricultural produce in terms of the aforesaid notification and so the supply of cold storage service in relation to these would remain chargeable to GST. - ADVANCE RULING NO. RAJ/AAR/2018-19/03 - - - Dated:- 11-6-2018 - MR NITIN WAPA, MEMBER AND SUDHIR SHARMA, MEMBER For The Applicant : Shri Alok Kothari, Advocate RULING SUBMISSION OF THE APPLICANT 1. M/s Sardar Mai Cold Storage Ice Factory) hereinafter referred to as Applicant ) submitted an application, seeking an Advance Ruling on the Entry No. 24 of the Notification No. I J/2017 Central tax (Rate) dated 28/06/2017 which at S. No. 24 (i)(i)(e) provides tax rate as NIL for services of loading, unloading, packing, storage or warehousing of agricultural produce as a support services to agriculture, forestry, fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by this group are agriculture produce and brought by farmers in a ready to marketable shape. But being a product of agriculture the product contains certain small pieces of stones. dust, mud and other impurities etc. In order to sale to consumers and as per the requirement of various other allied laws like Food Safety and Standards Authority of India (FSSAI) The produce are require to be clean therefore aforementioned impurities are removed by cleaning which is either done by the cultivator or traders before it comes for storage purpose. But the agriculture produce retains its essential character and there is no change in the product or its marketability due to the cleaning process. The products which are sold by cultivator and stored at the applicant's cold storage, remains the same agriculture product except the difference that farmers sold the goods with small pieces of stones, dust. mud. impurities etc. and the trader who bought the goods and arranges for the cold storage of the goods gels it cleaned prior to storage so that unnecessary storage of waste product should not be done. The process of cleaning or removing the dust does not change the es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bench to explain the contention. Group-C Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Tamarind (Imli) The Tamarind are primarily produced or cultivated by small farmers who remove the shell or the upper part and bring the inner part (which is the consumable part ofTamarind) for sale. The Tamarind may or may not come for storage with seeds. 1. That as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the applicant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (vii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06 201 7 and hence attracts NIL rate of duty. 2. That the applicant will reproduce the sample of the goods at the time of Hearing, before the Bench to explain the contention. Group-D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocessing is require. There is no intermediary process is ever done or require right from the point o\ peeling of the skin till the point of consuming. 1. That as per the description provided in Column No.2 there is clear cut storage ofthe agriculture produce and the applicant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (vii) ofthe Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and hence attracts NIL rate of duty 2. That the applicant will reproduce the sample of the goods at the time of Hearing, before the Bench to explain the contention. Group-F Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Groundnuts (Mungphali) 2. Copra Gola (Coconut) Groundnut and coconut as globally known are products with outer shell which has no use. The farmers bring the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssential character of the agriculture produce. 1. That as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the applicant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (vii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and hence attracts NIL rate of duty. 2. That the applicant will reproduce the sample of the goods at the time of hearing before the Bench lo explain the contention. 4. The applicant submitted that in respect of the products categorised from Group A to Group G above, it is very clear that none of the products discussed above goes through any processing till they come to the cold storage which changes the essential character or marketability of the agriculture produce purchase from the farmers/cultivators by the traders. The buyers of the agriculture produce in all the above cases are not carrying out any process leading to change in essential character or enhancing the marketability of agriculture produce which is purchased fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant firm to the goods as mentioned above in the table as Group A to Group G. attracts Nil rate of duty or not as per Notification No. 11/2017 Central tax (Rate) dated 28/06/20172017 and Notification No 12 2017 -Central lax (Rate) dated 28/06/2017 Findings: 8.1. As per Notification No. 11/2017 Central tax (Rate) dated 28/0672017,Sr, No. 24 in the table therein. Central tax on the intra-State supply of services of description Support .services to agriculture, forestry, fishing, animal husbandry is applicable at NIL rate. In the said notification, in the Table, as per serial number 24. description of service given as. (i) Support services to agriculture, forestry, fishing, animal husbandry. Explanation . - Support services to agriculture, forestry, fishing, animal husbandry mean - (i) 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (a) agricultural operations directly related to production oi an) 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 marketable for the primary market: (d) renting or leasing of agro machinery or vacant land with or without a structure incidental its use: (e) loading, unloading, packing, storage or warehousing of agricultural produce: (f) Agricultural extension services; Further definition of agricultural produce, as defined under explanation 2(d) of the Notification No. 12/2017 Central tax (Rate) dated 28/06/2017 as 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural Produce . Before we decide that whether goods mentioned in Annexure A fall under category o\ agricultural produce or not they should be analyzed on basis of the following points: (a) Are the goods mentioned in Annexure A are those goods which are being sold by farmers/cultivators in Primary Market. (b) Are the activities/processing done on these goods as mentioned in Annexure A are of those nature which are usually done by the farmers/Cultivators at farm level or instead are being done by skilled labour by help of certain tools or machines following specific procedures. (c) Is there a considerable value addition brought about by the processing of goods 8.4 Based on above explanation, goods as per annexure A (Group A to G) are discussed as follows :- Annexure A (Group A) Fennel(Saunf), Coriander(Dhaniya), Cumin Seeds (Jeera), Carom Seeds(Ajwain) ,Fenugreek Seeds(Kasoori Methi),Mustard Seeds(Sarson),Bn)vvn Mustard Seeds (Rai),.Nigella Seeds(Kalonji),Poppy Seeds(Posara Dana): If no further processing is done on above mentioned goods or such processing is done as is usually done by a cultivator or producer which does not alter its essential ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Dry Peas (Sukha Matar) is obtain from processing of green peas (Hara matar). Green/raw mango, green kathodi. kachha amla. gila Singhada. hara Matar arc harvested by farmer fresh and brought to primary market(mandis) from where its bought by traders/processors who intern under take certain specific processes such as washing , cutting, shelling, cleaning, drying, packing etc. These processes lead to a considerable value addition as compared to that of product sold in primary market which is in itself reflection of change in there essential characteristic hence the above cannot be characterized as Agricultural produce. Annexure A (Group E) Cinnamon ( Dalehini), Gum (Gond), Arjuna Chaal ( Arjun Chaal) : Cinnamon (Species) is obtained from the inner bark of a tree, species Genus CTNNANOMUN. Immediately after harvesting the bark has to undergo a spec process involving hammering . scrapping, drying, cutting, fumigation,packing etc. These process are done by skilled labour and nearly accounts for 60% costs of the final product. After harvesting these process are not done by fanners but arc being done by skilled labour at specific plants set up to extract bark from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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