2020 (8) TMI 632 - AAR - GST

Classification of goods - rate of tax - agricultural implements used for, rubber tapping such as spouts, cup holder and collection cups - HELD THAT - It is pointed out that spout, cup holder and latex collection cup are agricultural implements used for rubber tapping and the main implements used in the rubber plantations for harvesting the rubber latex. 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 an agricultural implement exclusively used for rubber tapping. There is no doubt that latex collection cup is an agricultural implement exclusively used for rubber tapping. Hence, this will come under the classification agricultural implements manually operated. Spout, Cup Holders and Collection Cups are agricultural implements used for rubber tapping and are covered under the description under HSN 8201 90 00 other hand tools of the kind used in agricultural, horticulture or forest and are exempt from GST as per Sl.No. 137 of Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017.

Summary

Issues Involved: Classification and rate of tax of agricultural implements used for rubber tapping such as spouts, cup holders, and collection cups.

Classification of Agricultural Implements:
The case involved a request for an advance ruling on the classification and tax rate of agricultural implements used for rubber tapping, specifically spouts, cup holders, and collection cups. The applicant, engaged in the manufacture and supply of plastic cups used by rubber farmers for agricultural operations, argued that these items were essential for rubber tapping. The spout, cup holder, and latex collection cup were described as agricultural implements crucial for harvesting rubber latex in rubber plantations. The authority had previously ruled that the latex collection cup was an agricultural implement exclusively used for rubber tapping. Consequently, the spouts, cup holders, and collection cups were classified as agricultural implements falling under HSN 8201 90 00, exempt from GST under Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017.

Exemption from GST:
The authority determined that the spouts, cup holders, and collection cups used for rubber tapping were classified as "other hand tools of the kind used in agricultural, horticulture, or forest" under HSN 8201 90 00. These items were considered agricultural implements and therefore exempt from GST under Sl. No. 137 of Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017. The ruling highlighted that these implements were crucial for rubber tapping activities and were integral to the agricultural process of collecting rubber latex. The classification under the specified HSN code and exemption from GST were based on the essential nature of these items in agricultural operations, particularly in rubber plantations for latex collection.

Conclusion:
In conclusion, the judgment by the Authority for Advance Ruling in Kerala clarified the classification and tax treatment of agricultural implements used for rubber tapping, including spouts, cup holders, and collection cups. These items were deemed essential for rubber tapping activities and were classified as agricultural implements exempt from GST under the relevant notification. The ruling emphasized the importance of these implements in the agricultural process, specifically in rubber plantations for the collection of rubber latex.