2022 (8) TMI 971 - AAR - GST

Agriculture extension services - Benefit of Exemption from GST - service contract - agriculture extension services for agro forestry is being carried out by Isha Outreach in collaboration with the Forest Department, Horticulture Department, Rural Development Panchayati Raj Department and Sericulture Department of Government of Karnataka - HELD THAT - The applicant furnished a copy of service contract with M/s Isha Outreach, Coimbatore, from which it is observed that the applicant appoints Mara Mitras who are Agriculture Extension Workers (AEW), to educate train farmers with regard to agro forestry by applying scientific research and knowledge. They also appoint Taluka Managers, District Managers and the Project Managers for coordinating and supervising the works under the project. In terms of service contract the applicant allocates the Mara Mitras to the taluka or gram panchayat on need basis. Mara Mitras, then visit the farmers in their allocated jurisdiction to enroll them into CC promoted agroforestry schemes, register demand for saplings and document the data - from the scope of work it is seen that the applicant through their mara mitras not only educate and train farmers with regard to agro forestry through scientific research and knowledge, but are also involved in hand holding the farmers from recording demand for saplings, picking up the samplings from nurseries to their plantation and also monitoring post plantation survival. Whether the activities of the applicant are covered under Agriculture Extension services? - HELD THAT - In the instant case, the applicant, through mara mitras, provides education and training to the farmers for cultivation of plants / trees, by applying scientific research and knowledge. All the other activities of the applicant carried out through mara mitras from selection of saplings to assisting in transportation planting, to monitoring the survival of plants are related to agricultural extension activity. Thus the services of the applicant are covered under agricultural extension services. In the instant case the farmers are into cultivation of various plants for agricultural produce and the services of the applicant are agricultural extension services and hence are exempted under entry number 57 of the notification.

Summary

Issues Involved:
1. Whether the services provided under a service contract for agricultural extension services are exempt under a specific notification.
2. If not exempt under the first notification, whether such services are exempt under any other notification.

Analysis:
1. The applicant, a registered person under GST Law, entered into a service contract with a public charitable trust to provide agricultural extension services for tree-based agriculture to farmers. The applicant sought an advance ruling to determine if the services provided fall under the exemption category of a specific notification. The applicant's interpretation was based on the definition of "agriculture extension services" under the relevant notification.
2. The service contract involved appointing Agriculture Extension Workers (AEWs) to educate and train farmers on agro-forestry using scientific research and knowledge. The workers collected farmer information, facilitated sapling pickup, monitored tree plantation, and collaborated with government departments for various schemes. The applicant's activities were detailed in the service contract, focusing on promoting tree-based agriculture and supporting farmers at various stages.
3. During the personal hearing, the applicant's representative reiterated the facts presented in the application. The authority clarified that the provisions of the CGST Act and the KGST Act are similar in most aspects. The authority considered the submissions, facts, and arguments presented by the applicant before making its decision.
4. The authority examined the service contract and the activities conducted by the applicant through appointed workers. It was observed that the services provided, including education, training, and support for agro-forestry, fell under the definition of agricultural extension services as per the relevant notification. The authority referenced specific clauses from the service contract to highlight the applicant's involvement in various aspects of promoting tree-based agriculture.
5. Based on the definition of agricultural extension services and the nature of activities performed by the applicant, the authority concluded that the services provided were indeed covered under agricultural extension services and thus exempted under the relevant notification. The authority ruled in favor of the applicant, stating that the services fell under the exemption category specified in the notification. The second question regarding exemption under another notification was deemed redundant, given the affirmative answer to the first question.