9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 1258 - AAR - GSTLevy of GST - service by the commission agents to the agriculturists for their sale or purchase of their produce not involving the agents - Whether service by the commission agents to the agriculturists for their sale or purchase of their produce not involving the agents as either a recipient of goods or as a supplier of goods are liable to tax or not? Held that - It is clear that the agent, who is a member of the applicant stores the turmeric in their godown, the sales of which is as per the guidelines of EMC. Also from the invoices furnished, it is seen that the invoice is raised by the agent on the buyer wherein the agriculturist is mentioned as the seller and is signed by the Farmer, agent and the buyer. Further, it is seen that the buyer pays the agent who after deducting his commission for the services rendered passes on the sale proceeds to the farmer. It is evident that these activities of the applicant are those covered by the definition of Commission agent under The Tamil Nadu Agricultural Produce Marketing (Regulation) Act, 1987 . From the supporting documents and materials filed by the applicant and the various statutory provisions, it is clear that the activities of the applicant are those services provided by an agent to the farmer, generally provided in relation to agricultural produce in the primary market regulated by a marketing committee. The applicant is only a Commission Agent providing support services for Agricultural produce and the services extended are rightly classifiable as Support service to agriculture.. under the Heading 9986 and the activity of the applicant attract NIL rate as per Sl. No. 24 (i) (i) (g) of the Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended and NIL rate of SGST as per Sl.N0. 24 (i) (i) (g) of G.O.(Ms) No 72 dated 29.06.2017 No. II(2)/CTR/532(d-14)/2017 as amended. Ruling - The service by the Commission Agents as per the submissions of the applicant to the agriculturists of turmeric is service under the Heading 9986 and is taxed to NIL rate of CGST as per Sl.No. 24 (i) (i) (g) of the Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended and NIL rate of SGST as per Sl.No. 24 (i) (i) (g) of G.O.(Ms) No 72 dated 29.06.2017 No. II(2)/CTR/532(d-14)/2017 as amended.
Issues:
Tax liability of services provided by commission agents to agriculturists for sale or purchase of produce. Analysis: Issue 1: Tax liability of services provided by commission agents The applicant, a registered society under Tamilnadu Societies Registration Act 1975, sought an advance ruling on whether services provided by commission agents to agriculturists for sale or purchase of produce are taxable. The applicant clarified that they act as commission agents exclusively for turmeric, providing storage services with charges based on a percentage of the sale price. The Erode Marketing Committee regulates their activities. The applicant argued that they are neither buyers nor sellers but service providers to agriculturists, exempt under Heading 9986(i)(g) of Notification No 11/12 of 2017 Central Tax(Rate) dated 28.06.2017. They provided supporting documents showing the process of sale, commission charges, and agreements with agriculturists and buyers. Issue 2: Interpretation of relevant laws The judgment examined the definition of 'Commission agent' under Section 2(7) of the Tamilnadu Agricultural Produce Marketing (Regulation) Act 1987, which defines the role and responsibilities of commission agents in agricultural produce marketing. The By-laws of the Erode Marketing Committee set forth regulations on commission charges, ensuring fair practices in buying and selling agricultural produce. The judgment also referenced Section 2(5) of the CGST Act, defining 'agent' as a person engaged in the business of supply or receipt of goods or services on behalf of another. Issue 3: Application of tax rates The ruling analyzed Sl. No. 24 of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017, which exempts services provided by commission agents for sale or purchase of agricultural produce from GST. The definition of 'agricultural produce' and 'Commission agent' under the notification and related laws clarified the applicability of the exemption. The judgment concluded that the services provided by the applicant as a commission agent fell under 'Support service to agriculture' under Heading 9986, attracting a 'NIL' rate of CGST and SGST. Conclusion: The ruling determined that the services provided by the commission agents to agriculturists for turmeric sale were correctly classified under Heading 9986, eligible for a 'NIL' rate of CGST and SGST. The judgment provided clarity on the tax liability of such services, aligning with the exemption provisions for agricultural produce marketing services.
|
