2019 (10) TMI 567 - AAR - GST

Classification of goods - rate of tax - agricultural implement or not or not - Agriculture Tree Climbing Apparatus-Unipole Manually operated - Exemption under Entry No. 137 of N/N. 12/2017 - Central Tax (Rate) dated 28.06.2017 - HELD THAT - In the instant case the goods in question Agricultural Tree Climbing apparatus-Unipole Manually operated is an agricultural implement and hence in common parlance it can be regarded as a tool, which is used by both hands and legs by human beings in agriculture specifically in relation to harvesting areca and pepper. Therefore the product in question merits classification as an agricultural implement / tool used in agriculture under Tariff Heading 8201 9000. Further the Jurisdiction Assistant Commissioner, LGSTO-265, Puttur, Karnataka has also furnished a report vide their letter dated 27.11.2018 confirming the usage of the said product only in agriculture - In the instant case the product in question falls under manually operated agricultural implement and hence qualify to be a tool of a kind used in agriculture. Therefore the aforesaid exemption is squarely applicable to the instant case. Thus, Agriculture Tree Climbing Apparatus-Unipole Manually operated Aluminium ladder is covered under Tariff Heading 820 land is covered under Entry No. 137 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 and hence is exempted.

Summary

Issues: Classification of goods as agricultural implement under GST

Analysis:
1. Issue of Classification: The applicant sought an advance ruling on the classification of their product, "Agriculture Tree Climbing Apparatus-Unipole Manually operated," made primarily from Aluminium, under the GST regime.

2. Applicant's Contentions: The applicant contended that their product qualifies as an agricultural implement, citing judgments from the Honorable Supreme Court and the High Court of Karnataka. They argued that the apparatus is used for agricultural activities like tree climbing for spraying pesticides and harvesting crops, making it an agricultural tool.

3. Legal Interpretation: The Authority for Advance Ruling analyzed the nature of the product and relevant tariff headings. Chapter 82 of the Customs Tariff covers tools and implements, with Heading 8201 specifically addressing agricultural implements manually operated or animal driven.

4. Decision Basis: The authority considered the physical characteristics of the product, its usage in agriculture, and the judicial precedents cited by the applicant. They concluded that the product indeed qualifies as an agricultural implement, falling under Tariff Heading 8201 9000, which attracts a Nil rate of GST.

5. Exemption Confirmation: The ruling confirmed that the product, being an Agriculture Tree Climbing Apparatus, falls under Entry No. 137 of Notification No. 12/2017 - Central Tax (Rate), thereby exempting it from GST.

6. Final Ruling: The Authority ruled that the "Agriculture Tree Climbing Apparatus-Unipole Manually operated Aluminium ladder" is classified under Tariff Heading 820 and is exempted under Entry No. 137 of the mentioned notification.