TMI Blog2021 (12) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under HSN 0910 30 10 attracts NIL Rate of GST and Dried Turmeric (subject Goods) is covered under HSN Code 0910 30 20 taxable at the rate of 5% GST. Thus, it is seen that the subject produce is a Spice and is not covered under the definition of an agricultural produce - the impugned services supplied by the applicant are not covered under clause (g) of Sr. No. 54 of Notification No. 12/2017-Central Tax (Rates) dated 27 th June, 2017. The impugned services supplied by the applicant are not exempt in terms of Sl. No. 54 Heading 9986 of Notification No.12/2017 CT(R) dated 28.06.2017 read with SI. No. 24 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017. In other words the said SI. 54 Heading 9986 of Notification No.12/2017 CT(R) dated 28.06.2017/SI. No. 24 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 is not applicable in the applicant's case and therefore the applicant is required o pay GST on the commission amounts received by him - Since the services supplied by the applicant are not exempt in the instant case, the corollary to it is that, the impugned services are taxable and accordingly, the applicant has to get registered under the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on the tender / auction, if farmer and buyer mutually agree to sale and purchase, the Applicant, as a commission agent facilitates activities ancillary to supply of agriculture product 'Turmeric' in APMC, for which he gets a fixed commission @3% as per APMC regulations. Applicant does not do any sort of trading of turmeric. 2.2 The Functions of Applicant are as under: (i) Awak of Turmeric - Farmers bring polished turmeric to the Applicant who gives this awak detail to concerned APMC. (ii) Souda (Auction) of turmeric - Applicant then calls for an auction, where any trader can participate. Auction is conducted under supervision of APMC officer and in the presence of Applicant, traders and farmers. (iii) Confirmation of souda - After open auction, if the farmer accepts the rate then Applicant gives confirmation to the trader on behalf of the farmer. If rate is not accepted by the farmer, then the said lot of turmeric is placed for auction again. If the farmer is not satisfied with the rate offered in auction or the services rendered by the Applicant, he can take back his lot of turmeric from the Applicant and engage some other Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices rendered by the Applicant Sowing and harvesting of turmeric crop is done by the farmer. Then, the crop of fresh turmeric is cleaned with normal water and thereafter boiled in a movable boiler by farmer at his farm land. Boiled turmeric is spread in the natural sun light for drying purpose and for making it marketable, the dried turmeric is polished through moveable polish machines by the farmer only. Such polished turmeric is packed in gunny bags and brought by the farmer to the APMC for sale. B. APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS 2.5- Whether 'Turmeric' is exempted from GST 2.5.1 The definition of agricultural produce has not been provided in CGST Act; However, as per the definition the term agricultural produce in Notification No. 11/2017-C. T. (Rate) and 12/2017- C.T. (Rate), both dated 28-6-2017; 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 processing is done as is usually done by a cultivator or producer w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural produce marketable and do not alter characteristics of 'Turmeric' as a agricultural produce. Hence, it is submitted that 'Turmeric' may be held as an 'Agriculture Produce' Whether Applicant' services are liable to GST in terms of Notification No.12/2017 CT(R) dated 28.06.2017 2.8 Applicant submits that he is a Commission Agent covered under Sec. 2 (5) of CGST Act, 2017. Further, as per SI.no. 54 of Notification No.12/2017 CT(R) dated 28.06.2017 and Sr. No. 24 No4iation No. 11/2017-C.T. (Rate) dated 28.06.2017, 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) . (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 mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply of the agricultural produce, and / or other goods or services supplied by them are not liable to tax or wholly exempt under. GST. 2.13 The CBIC has further clarified, by issuing corrigendum to above circular, vide F.No. CBEC/20/16/04/2018-GST dated 5.11.2018, that a Commission Agent under APMC Act makes supplies on behalf of an agriculturist. Further as per Sec. 23 (1) (a) of CGST Act, 2017, an agriculturist is not liable for registration and so he is not a taxable person. Thus, a Commission Agent who is making supplies on behalf of such an agriculturist, who is not a taxable person, is not liable for compulsory registration under Sec. 24 (vii) of the CGST Act. 03. CONTENTION - AS PER THE CONCERNED OFFICER: OFFICER SUBMISSIONS dated 13.10.2021:- 3.1 Turmeric is classified under tariff heading 0910 and is taxable at the rate of 5%. 3.2 The supply of goods by the commission agent on the behalf of the farmer (principle to the trader/purchaser) is a taxable supply in terms of definition as per Section 2 (108) of MGST ACT 2017. 3.3 The applicant is liable to the register in terms of the subsection 1 of section 22 of MGST ACT2017. 04. HEARING 4.1 P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make them suitable for sale directly to the consumer. Thus such processed Turmeric does not fall under the definition of an 'agricultural produce' as defined in Notification No. 11/2017-C.T. (Rate) and 12/2017-C.T. (Rate), both dated 28-6-2017. 5.5 Chapter 9 covers Coffee, Tea, Mate and Spices, Further, it is observed that Turmeric is covered under Chapter Heading 0910 of the GST Tariff. Tariff Item 0910 covers Ginger, saffron, turmeric (curcuma), thyme, bay leaves, curry and other spices. Under Chapter 0910 Ginger (other than fresh ginger), saffron, turmeric (curcuma) (other than fresh turmeric), thyme, bay leaves, curry and other spices are chargeable to GST @ 5%. Thus it is clear that Turmeric is considered as a Spice. We find that Fresh Turmeric other than in processed form falling under HSN 0910 30 10 attracts NIL Rate of GST and Dried Turmeric (subject Goods) is covered under HSN Code 0910 30 20 taxable at the rate of 5% GST. Thus, it is seen that the subject produce is a Spice and is not covered under the definition of an agricultural produce . 5.6 In view of the above, we find that the impugned services supplied by the applicant are not covered under claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions are answered thus - Question No.1 Whether the Turmeric (Turmeric in Whole form - not in powder form) is covered under the definition of 'Agriculture Produce' and exempted from GST? If not, what is the HSN code of Turmeric and the rate of GST on the Turmeric? Answer :- Dried and Polished Turmeric as in the instant case, is not covered under the definition of 'Agriculture Produce' and is not exempted from GST. The HSN code of the impugned product is 0910 30 20 and the rate of GST is 5% (2.5% each of CGST and SGST) Question No.2 Whether services rendered by Applicant as a Commission Agent in APMC, Sangli are liable to GST in terms of SI. 54 Heading 9986 of Notification No.12/2017 CT(R) dated 28.06.2017 read with SI. No. 24 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017? Answer :- The impugned services rendered by the applicant are taxable under GST and not exempt terms of SI. 54 Heading 9986 of Notification No.12/2017 CT(R) dated 28.06.2017 read with S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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