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RULING ON GST LEVY ON SUPPLY OF LOADING / UNLOADING SERVICES AT PORT FOR AGRICULTURAL PRODUCE |
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RULING ON GST LEVY ON SUPPLY OF LOADING / UNLOADING SERVICES AT PORT FOR AGRICULTURAL PRODUCE |
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While the services in relation agricultural produce such as loading, unloading are exempt from levy of GST, the Advance Ruling Authority as well as Appellate Advance Ruling Authority, West Bengal examined taxability of such services in case of import of cargo of yellow peas in the case of T.P. Roy Chowdhury & Company Pvt. Ltd. The applicant was rendering the services of loading, unloading etc. after the cargo of yellow peas, imported from a foreign land, reaches the port of entry The Applicant handled imported raw whole yellow peas in bulk that contained 1.45% broken grain and 10.86% split kernel. The applicant was of the view that the percentage of broken grain or split kernel was insignificant and occurred in the course of the handling of the cargo and did not alter its character as raw whole yellow peas, and accordingly, be treated as ‘agricultural produce’ as defined in clause 2(d) of the Exemption Notification No. 12/2017-CT (Rate). The applicant sought advance ruling from the Authority for Advance Ruling on “whether such imported yellow peas are ‘agricultural produce’ and services by way of handing of it is eligible for exemption under Sl.No. 54(e) of Notification No. 12/2017 - Central Tax (Rate) dated 28/06/2017 (corresponding State Notification No. 1136 - FT dated 28/06/2017), as amended from time to time (hereinafter collectively referred to as Exemption Notification).” The Authority for Advance Ruling, vide Order dated 19.08.2019 ruled that the exemption under Sl No. 54(e) of Notification No. 12/2017 - Central Tax (Rate) dated 28/06/2017 (corresponding State Notification No. 1136 - FT dated 28/06/2017), as amended from time, is not applicable to the Applicant’s supply of service of loading, unloading etc. after the cargo of yellow peas, imported from a foreign land, reaches the port of entry. IN RE: M/S. T.P. ROY CHOWDHURY & COMPANY PVT. LTD. [2019 (8) TMI 1154 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL] Being aggrieved, assessee preferred an appeal u/s 100 of CGST Act, 2017 before the Appellate Authority for Advance Ruling, West Bengal (AAAR) on the following grounds:
The AAR observed that the moot question is that whether the Appellant's service is eligible for exemption under Sl. No. 54(e) of the Exemption Notification. There is no dispute that raw whole yellow peas are agricultural produce covered under serial no. 45 of the Rate Notification and are exempted goods. However, this particular consignment of raw whole yellow peas was harvested in foreign land and the concerned primary market or the farmers' market is located in that foreign land. It observed from a combined reading of entry number 54 of the Exemption Notification and definition 2(d) of the Exemption Notification that all services and processes are excluded beyond the primary market. The term primary market in common parlance refers to farmers market like “mandi” or “arhat” being a place where the farmers directly sell their product to the buyers like wholesalers. millers. food processing units, etc. The spirit of the legislature was intended to boost the agricultural sector of the home country and not that of a foreign land. The primary market in the instant case being located in foreign shores does not conform to the definition as stated above. Further, there is no evidence that the grains have not undergone any type of treatment before leaving the foreign country from where they have been imported into India. Thus, the AAAR did not find any find any infirmity in the advance rulling. In result , appeal failed and the advance ruling was upheld. IN RE: M/S. T.P. ROY CHOWDHURY & COMPANY PVT. LTD. [2020 (1) TMI 139 - APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL]
By: Dr. Sanjiv Agarwal - April 5, 2021
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