2024 (2) TMI 169 - AAR - GST

Classification of goods - Exemption from GST / IGST - agricultural implement or not - tree pruners covered by HSN Code 82016000 or not - goods relates to Agricultural implements manually operated or animal driven i.e. hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes, axes, bill hooks and similar hewing tools; secateurs and pruners of any kind ; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry other than Ghamella or not. HELD THAT - It is an admitted fact that the said product is made, predominantly, out of raw material Aluminium and hence the probable classifications would be either based on the usage or based on the raw material i.e. articles of aluminium. Hon ble Supreme Court in the case of U.P. STATE AGRO INDUSTRIAL CORPORATION LTD VERSUS KISAN UPBHOKTA PARISHAD ORS 2007 (12) TMI 450 - SUPREME COURT stated that 'in common parlance implements are usually regarded as tools used by human beings with their hands (and sometimes with their legs), or driven by animal power' - In the instant case, the goods in question Tree Pruners is an agricultural implement and hence in common parlance it can be regarded as a tool, which is used by both hands by human beings in agriculture specifically in relation to harvesting areca, coconut and pepper. Therefore, the product in question merits classification as an agricultural implement / tool used in agriculture under Tariff Heading 8201 6000. In the instant case the product in question i.e, tree pruner is a manually operated agricultural implement and hence qualify to be a tool of a kind used in agriculture. Furthermore, 'pruners of any kind' finds specific mention in the description of entry at Sl.no. 137 and therefore the aforesaid exemption is squarely applicable to the instant case.

Summary

Issues involved: Classification of goods under HSN Code, Exemption under CGST/SGST/IGST Act.

Classification of Goods:
The applicant, a Partnership firm engaged in buying and selling "Tree Pruners," sought advance ruling on whether the product falls under HSN Code 82016000 relating to Agricultural implements. The product, a pole with a manual extension and knife, predominantly made of aluminium, is used for agricultural activities like harvesting areca, pepper, coconut, and spraying pesticide. The applicant argued that due to its specific use in agriculture, it should be classified as an agricultural implement under Tariff Heading 8201 6000.

Exemption under CGST/SGST/IGST Act:
The applicant also sought clarification on whether the supply of Tree Pruners to farmers is exempt from the CGST/SGST/IGST Act. The applicant contended that the product qualifies as an agricultural implement manually operated by human beings, falling under the exemption provided in Entry No. 137 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.

Findings & Discussion:
The Authority considered the applicant's submissions and facts presented. It was noted that the product's composition primarily of aluminium and specific use in agriculture supported its classification as an agricultural implement. Referring to relevant legal precedents, including the Supreme Court and High Court judgments, the Authority concluded that the Tree Pruners indeed qualified as an agricultural tool under Tariff Heading 8201 6000. Additionally, the product fell within the exemption criteria specified in Entry No. 137 of the notification, thus making the supply of Tree Pruners exempt from taxation under the CGST/SGST/IGST Act.

Ruling:
a) Tree pruners under HSN Code 82016000 are classified as Agricultural implements manually operated or animal driven, falling under specific tools used in agriculture.
b) The supply of Tree Pruners is exempted under Entry No. 137 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.