TMI Blog2022 (11) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... duce on par with any agriculture produce and they are entitled for exemption in respect of services availed by them. Had the activities of the applicant are only cleaning, drying, grading without involving any chemical processing on the subject produce, then the services would be on agriculture produce and exemption would be available. However, since in this case it is not proved beyond doubt by the applicant that their activities get exempted under the said two notifications, we are not inclined to accept the plea of the applicant. The order passed by the lower authority is upheld - Appeal disposed off. - AAAR.COM/02/2022 Order-in-Appeal No. AAAR/08/2022 - - - Dated:- 19-10-2022 - NEETU PRASAD AND B.V. SIVA NAGA KUMARI, MEMBER (Passed under Section 101 (1) of the Telangana Goods and Services Tax Act, 2017) Preamble 1. In terms of Section 102 of the Telangana Goods and Services Tax Act, 2017 (TGST Act, 2017 or the Act), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its own accord, or is brought to its notice by the concerned officer, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous facilities after processing them. In the process they also transport the seeds by engaging a GTA. The appeal is filed against the Order No.04/2022 dated 11.2.2022 ( impugned order ) passed by the Telangana State Authority for Advance Ruling (Goods and services Tax) ( Advance Ruling Authority / AAR / lower Authority ). Brief Facts: 3. The applicant has sought clarification before the lower authority in respect of following activities vis a vis their taxability under Goods and Services Tax Act: 4. The lower authority, after following the due process of law, has inter alia, held that as under: All grains do not qualify to be seed. Under ST law, seed is treated separately from grain. Therefore, seed is included at Sl.No. 79 of Nof No. 02/2017, dt. 28.6.2017 wherein exemption is accorded to all goods of seed quality. Therefore, seed and grain are not one and the same. The law applicable to grain and seed will be different and therefore concessions applicable to grain produced by a cultivator will not be applicable to seed. The applicant is supplying goods which are produce of cultivation of plants. However, they are of seed quality and not grain, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above notifications. Not exempt as discussed above. 3) Whether the processes, namely, cleaning, drying, grading and treatment with chemicals (heading No.9986) carried out by the applicant - job worker on job work basis, are exempt from payment of GST in terms of 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 there under and Sl.No.24(1)(c), (h) and (iii) of the Notification No. 11/2017- Central Tax (Rate)dated 28-06-2017 read with the definition of agricultural produce there under or any other entry/entries of the above notifications. Not exempt as discussed above. 6. Aggrieved by the above rulings, the appellant is before this Authority. The grounds of appeal on which the appellant relies, interalia, are as under: All the produce in result of cultivation is essentially an agriculture produce and the seed is nothing but the best quality of the agricultural produce graded from out of the agriculture produce basing on its germination; They relied on the decision of the Hon ble Apex Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agriculture produce is with an intent and with a noble cause that food grains should be available to the general public at a lessor cost since it is the basic necessity to life. Similarly, when the seed for sowing purpose is exempted the reason behind the exemption is that the seed should be made available to the growers/farmers/cultivators at a lessor or subsidised cost. The storage of the seeds in the leased storage facility/godowns, loading, unloading and packing of the seeds (heading No.9986) by the job worker on job work basis are exempt from payments of GST in terms 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(Ret) dated 28-06-2017 or any other entry/entries of the above notifications. And also the processes, namely, cleaning, drying, grading and treatment with chemicals (heading No.9986) carried out by the job worker on job work basis are exempt from payment of GST in terms of Sl.No.54(c), (h) of the Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 read with the definition of agricultural produce there under and Sl.No.24(1)(c), (h) and (ill) of the Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (R), dt. 28.6 2017. Both the notifications have defined agriculture produce as 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 which does not alter its essential characteristics but makes it marketable for primary market. 12. The appellant contends that their activities falls under the definition of agriculture produce , and hence, they are eligible for exemption under above two notifications. As against this contention, the lower authority held that the activities are outside the purview of definition of 'agriculture produce and hence, no exemption is available to the applicant. 13. Hence, it becomes imperative to analyse the definition of agriculture produce . The primary factory which needs to be understood is that to get into the bracket of agriculture produce for claiming exemption, the main condition is that either no processing is done on the produce or such processing is done as is usually done by a cultivator or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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