2018 (6) TMI 622 - AAR - GST

Classification of goods - Cereals pulses spices copra jaggery (Gur) groundnuts (with or without shell) groundnut seeds turmeric dried and ginger dried (soonth) cashew almond kismis jardalu anjeer (fig) date ambli foal - Whether all cereals pulses spices copra jaggery (Gur) groundnuts (with or without shell) groundnut seeds turmeric dried and ginger dried (soonth) cashew almond kismis jardalu anjeer (fig) date ambli foal are covered under the definition of Agriculture Produce as defined under N/N. 11/2017-Central Tax (Rate) dated 28.06.2017? - Held that - The GST rate for services relating to agricultural produce by way of loading unloading packing storage or warehousing of agricultural produce is NIL as per Sl. No. 54 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and corresponding Notification issued under GGST Act 2017 - the applicability of Goods and Services Tax on warehousing of agricultural produce has been clarified vide Circular No. 16/16/2017-GST dated 15.11.2017 issued by the Government of India Ministry of Finance Department of Revenue Central Board of Excise Customs (Tax Research Unit). Ruling - Pulses (commonly known as Dal ) (de-husked or split) jaggery processed dry fruits such as processed cashew nuts raisin (kismis) apricot (jardalu) fig (anjeer) date tamarind (ambali foal) shelled groundnuts / groundnut seeds and copra are not agriculture produce as defined under Notification No. 11/2017-Central Tax (Rate). Cereal on which any processing is done as is not usually done by a cultivator or producer will fall outside the definition of agriculture produce Processed spices including processed turmeric and processed ginger (soonth) are not agriculture produce as defined under Notification No. 11/2017-Central Tax (Rate). However groundnuts with shell turmeric and ginger on which 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 make it marketable for primary market would fall within the definition of agriculture produce Whole pulse grains such as whole gram rajma etc. and cereal on which 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 fall under the definition of agriculture produce as defined under Notification No. 11/2017-Central Tax (Rate).

Summary

Issues:
1. Interpretation of the definition of 'Agricultural Produce' under Notification No. 11/2017-Central Tax (Rate).
2. Taxability of various agricultural products and processed goods for services related to loading, unloading, packing, storage, or warehousing.

Issue 1: Interpretation of 'Agricultural Produce' Definition:
The applicant sought clarification on whether specific products fall under the definition of 'Agricultural Produce' as per Notification No. 11/2017-Central Tax (Rate). The applicant argued that goods like cereals, pulses, spices, copra, jaggery, and various fruits are covered under the definition. However, the GST Commissionerate contended that products requiring further processing beyond cultivation do not qualify as 'Agricultural Produce' under the said notification.

Issue 2: Taxability of Agricultural Products and Processed Goods:
The Authority analyzed the definition of 'Agricultural Produce' under the notification and provided a detailed ruling on the taxability of various products. It was determined that de-husked pulses, jaggery, processed dry fruits, processed spices, and certain other goods do not fall within the definition of 'Agricultural Produce' due to processing altering their essential characteristics. On the other hand, whole pulse grains, certain cereals, and specific products with minimal processing that maintain their essential characteristics for the primary market were considered as 'Agricultural Produce' eligible for NIL tax rate on related services.

Summary of Ruling:
The Authority ruled that de-husked pulses, jaggery, processed dry fruits, and certain processed spices do not qualify as 'Agricultural Produce' under the notification. However, whole pulse grains, specific cereals, and certain products with minimal processing maintaining essential characteristics for the primary market are considered 'Agricultural Produce' eligible for NIL tax rate on related services. The ruling clarified the taxability of various agricultural products and processed goods based on the interpretation of the notification's definition of 'Agricultural Produce.'