2020 (8) TMI 634 - AAR - GST

Classification of goods - rate of tax - agricultural implements namely latex collection cup, made of plastic, used exclusively for collection of rubber latex, an agricultural activity - HELD THAT - This authority has already issued ruling on the issue vide IN RE M/S. GEO THOMAS AND COMPANY 2019 (11) TMI 39 - AUTHORITY FOR ADVANCE RULING, KERALA , that latex collection cup is exclusively used as an agricultural implement for rubber tapping. The Rubber Board has accepted that plastic latex collection cups are agricultural implements widely being used in rubber plantations for collection of latex directly from the rubber trees. Therefore, it can be safely classified as agricultural implements manually operated used in the rubber plantations for harvesting the rubber latex. It is not specifically classified in Chapter 82 of Customs Tariff. However, these items comes under the description covered under H5N 8201 90 00 other hand tools of the kind used in agriculture, horticulture or forest as it is essentially used for collection of rubber latex by rubber cultivators. Plastic latex collection cup is an agricultural implement exclusively used for rubber tapping and comes under the classification H5N 8201 90 00 other hand tools of the kind used in agriculture, horticulture or forest . As such it is exempted from G5T as per Sl. No. 137 of Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017.

Summary

Issues: Classification and tax rate of plastic latex collection cups used in agricultural activities.

The judgment by the Authority for Advance Ruling, Kerala, pertained to the classification and tax rate of plastic latex collection cups used exclusively for collecting rubber latex in agricultural activities. The applicant, engaged in the supply of these cups, sought clarification as to whether these cups qualified as agricultural implements. It was established that the plastic cups were used by rubber farmers for agricultural operations, specifically for collecting latex from rubber trees. The cups were certified by the Rubber Board as being essential for rubber tapping, a recognized agricultural activity.

The Authority, after thorough examination and referencing a previous ruling, determined that the plastic latex collection cups indeed qualified as agricultural implements. These cups were considered manually operated tools used in rubber plantations for harvesting rubber latex. While not specifically classified in the Customs Tariff, they were deemed to fall under the category of "other hand tools used in agriculture, horticulture, or forest." Consequently, the plastic cups were classified under H5N 8201 90 00 and were exempted from GST as per Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017.

In conclusion, the Authority ruled that the plastic latex collection cups used for rubber tapping were classified as agricultural implements and were exempt from GST. This decision provided clarity on the tax treatment of such essential tools used in agricultural activities, ensuring compliance with relevant regulations and benefiting rubber cultivators utilizing these cups for latex collection.