2020 (8) TMI 636 - 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 HSN 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 HSN 8201 90 00 other hand tools of the kind used in agriculture, horticulture or forest . As such it is exempted from GST as per Sl.No. 137 of Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017.

Summary

Issues: Classification and rate of tax of agricultural implements namely latex collection cup made of plastic, used exclusively for the collection of rubber latex, an agricultural activity.

Classification of Latex Collection Cup: The Authority for Advance Ruling, Kerala, examined whether the plastic latex collection cup used for rubber tapping qualifies as an agricultural implement. The cups are attached to rubber trees for latex collection and are made from reprocessed plastic lumps. The Rubber Board certified that these cups are essential for collecting rubber latex, which is considered an agricultural activity. The Authority referred to a previous ruling that established the latex collection cup as an agricultural implement for rubber tapping. Although not specifically classified in Chapter 82 of the Customs Tariff, the cups fall under HSN 8201 90 00 as "other hand tools used in agriculture, horticulture, or forest." The ruling confirmed that the plastic latex collection cup is an agricultural implement exempted from GST under Sl. No. 137 of Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017.

Rate of Tax and Exemption: The Authority determined that the plastic latex collection cup is exclusively used for rubber tapping, making it eligible for exemption from GST. The classification under HSN 8201 90 00 as an agricultural implement used in agriculture, horticulture, or forest solidified its exemption status. The ruling clarified that the cup falls under the description of hand tools used in agricultural activities, specifically for harvesting rubber latex in plantations. Consequently, the plastic latex collection cup was deemed exempt from GST as per the relevant notification.

In conclusion, the judgment by the Authority for Advance Ruling, Kerala, established the plastic latex collection cup as an agricultural implement essential for rubber tapping activities. The detailed analysis considered the cup's usage, material, and certification by the Rubber Board to confirm its classification under HSN 8201 90 00. The ruling provided clarity on the exemption from GST for the plastic cup, aligning with its role as a crucial tool for agricultural operations in rubber plantations.