2021 (3) TMI 914 - AAR - GST

Exemption provided in SI.No.54(e) under Heading 9986 of GST Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - services such as loading, unloading, packing, storage or warehousing of imported agricultural products including wheat, to any importer or trader - HELD THAT - On perusal of the Notification 12/2017 Central Tax (Rate) dated 28.06.2017, it is clear that for getting eligibility for exemption under SI.No.54 (e) covered under Heading 9986 the services of loading, unloading, storage or warehousing have to fulfil the conditions mentioned therein i.e. the Services need to be relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel raw material or other similar products or agricultural produce - the said services of loading, unloading, packing, storage or warehousing rendered by a taxpayer can be eligible for exemption only if they are rendered for the above purposes as clearly defined in the Notification i.e. only if the services are extended till the products are taken to primary market for disposal and as a corollary any services extended beyond the stage of primary market are not eligible for classification under the Service Accounting Code 9986 and hence cannot be considered for exemption under the said Notification. The applicant is providing the services of loading, unloading, packing, storage or warehousing in respect of the 'wheat' which is procured from the farmers from the foreign country and after getting imported into India at Karaikal Port is destined to importer's factory for further processing and it is not destined to the primary market as required for the services to be classified under sl. No. 54 (e) of Heading 9986 of the said exemption Notification. Therefore, the said services rendered by the applicant in the instant case are not eligible for the exemption under the said Notification - Application disposed off.

Summary

Issues:
1. Interpretation of exemption under SI.No.54(e) of GST Notification No.12/2017 for services related to agricultural products.
2. Eligibility criteria for exemption under Heading 9986 of GST Notification No.12/2017.
3. Definition of "agricultural produce" and "primary market" in the context of exemption provisions.
4. Comparison with a similar ruling by West Bengal Authority for Advance Ruling.

Analysis:
1. The applicant sought an Advance Ruling on whether services like loading, unloading, packing, storage, or warehousing of imported agricultural products, including wheat, qualify for exemption under SI.No.54(e) of GST Notification No.12/2017.
2. The Authority noted that to be eligible for exemption under Heading 9986, services must relate to the cultivation of plants or rearing of animals for specific purposes, as defined in the Notification.
3. The Notification defines "agricultural produce" as products from cultivation or rearing without further processing beyond what a cultivator typically does, making it marketable for primary markets.
4. The services provided must extend until the products reach the primary market for disposal to qualify for exemption under the Notification.
5. In this case, the applicant's services for wheat imported into India did not reach the primary market but were destined for further processing at the importer's factory, making them ineligible for exemption under SI.No.54(e).
6. The Authority referenced an order by the West Bengal Authority for Advance Ruling, which ruled similarly regarding services provided after the cargo reaches the port of entry.
7. Consequently, the Authority ruled that the services of loading, unloading, packing, storage, or warehousing for imported wheat at Karaikal Port do not qualify for exemption under SI.No.54(e) of the Notification.
8. The ruling disposed of the application, allowing either party to appeal to the Puducherry State Appellate Authority for Advance Ruling within 30 days if aggrieved by the decision.