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TMI Blog2018 (7) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides storage and warehousing facilities to variety of agriculture produce. The explanation provided at pi. 4 (vii) of the notification defines agriculture produce as "agricultural produce" means any produce out of 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, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics hut makes it marketable for primary market. "And If any Product falls under the definition of the agriculture produce, then by virtue of S. No 24 of the notification the activity of storage attracts Nil rate of Duty 3. The applicant has submitted list of various products and the process done on those agriculture commodities before the)' come into cold storage. In order to seek advance ruling that whether the goods which comes for storage will come under the definition of agricultural produce or not &whether the supply of Cold Storage services by the applicant Hint 10 various products as mentioned herein below attracts Nil rate of duty or not as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence attracts "NIL" rate of duty. 2. Thai the applicant will reproduce the sample of the goods at the time of Hearing, before the Bench to explain the contention. Group-B Name of goods Stage at which commodities come for storage and process it' anv applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Turmeric (Haldi) 2. Dried Ginger (South) 3. Dates(Khajoor) 4. Dry Dates (Chhuhara) 1. That the goods like Turmeric, Ginger, Dates, Dry Dates which are undoubtedly an agriculture produce but in order to make them marketable both the cultivator or the farmer undertakes the process of preserving by way of polishing or drying of the product which doesivt change the essential character of the products in question but makes it sustainable& marketable. The traders buy these goods and make them available for cold storage. Thus, products which are stored are an agriculture produce. 2. It is also pertinent to bring to your kind notice that sometimes the traders purchase the raw form from the farmers and get it polished to make it marketable and get it stored. But the product retains its essential character of being an agriculture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er before bringing the goods for storing the goods at cold storage. Thus, the product in questions retains it essential character as agriculture produce. 1. That as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the applicant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in (he explanation provided at Pi. No. 4 (vii) of the Notification No. 1 1/20 1 7 Central lax (Rate) dated 28/06/2017 and hence attracts "NIL' rate of duty. 2. That the applicant will reproduce the sample of the goods at the time of hearing before the Bench to explain the contention. Group-E Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Cinnamon (Dalchini) 2. Gum(Gond) 3. ArjunaChhal The products in a question are bark (Outer most layer of the wood) of the trees. The product always retains its natural shape as the bark is outermost part of the trees and without any processing it is ready to use or consume. It comes to market for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication No. 1 1/2017 Central tax (Rate) dated 28/06/2017 and hence attracts "NIL" rate of duty. 2. That the applicant will reproduce the sample of the goods at the time of Hearing, before the Bench to explain the contention. Group-G Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Dry fruits sueh as Fig(Anjeer). Almond (Badaam). Walnuts (Akhrot).Pistachio (Pista) . Lotus Seeds Pop (PhoolMakhana) etc. The product in a question is product with outer shell which has no use. So. removal of outer shell either at the hands of cultivator or at the hands of the trader will never bring any change in its essential character or marketability of the product The goods are always stored in its form without any processing ever done right from the stage of cultivator till storage. The removal of outer shell can never be categorised by any stretch of imagination as a process as its never contributes either to marketability or changing the essential character of the agriculture produce. 1. That as per the description provided in Column No. 2 there is a clear cut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted a written submission to further clarity applicant's stand on the matter which was placed on the record. He requested that the case may be decided as per the above submission made earlier. 6.2 The jurisdictional officer in his/her comments dated 25.05.2018 has stated that goods mentioned in annexure A (Group A) could be covered under the definition of 'Agricultural Produce' as defined under explanation 4 (VII) of Notification No. 11/2017 Central Tax (Rate) Dated 28-06-2017 and Notification No. 12/2017 Central fax (Rate) Dated 28-06-2017 at para 2 (D) hence attracted nil rate of duty. Further Goods mentioned in Annexure A (Group-B to G) undergo some or other form of processing and would not fall under the 'Agricultural Produce'. Issues to be decided: 7. The issue involved in this case is. whether the goods as mentioned in Group A to Group G of Annexure A which comes for storage will come under the definition of agricultural produce or not & whether the supply of Cold Storage services by the applicant firm to the goods as mentioned above in the table as Group A to Group G. attracts Nil rate of duty or not as per Notification No. 11/2017 Central tax (Rate) dated 28/06/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28/06/2017 as "agricultural produce" means any produce out of 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, on which either no further processing is done or such processing is doneas is usually done by a cultivator or producer which does not alter its essential characteristics b marketable for primary market. 8.2 As per Notification No. 12/2017 Central tax (Rate) dated 28/06/2017. Sr. No. 54 in the table therein. Central tax on the intra-State supply of services of description "Support services to agriculture, forestry, fishing, animal husbandry" is exempt. In the said notification, in the Table, as per serial number 54, description of service given as Services 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 by way of- (a) agricultural operations directly related to production oi' an) agricultural produce including cultivation, harvesting, threshing, plant protection or testing: (b) supply of farm labour: (c) proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the category of 'Agricultural Produce' as defined in Notification. In clarification issue as per circular No. 16/16/2017 GST dated 15-11-2017. issue regarding GST applicability on warehousing of 'Agricultural Produce' such as coffee, pulses jagary etc. has been clarified. The clarification clearly deals with certain issue such as:-. 1. Primary Market :- Green tea leaves which attain primary marketability soon alter being plucked from tea plant is "Agricultural Produce' and not the dried tea leaves. 2. Essential characteristic :- Sugarcane looses its essential characteristic when processed as jaggery. Hence jaggery is not a 'Agricultural Produce'. 3. Process :- Dehusking and splitting or both of pulses is not carried out by farmer or at farm level therefore pulses are not 'Agricultural Produce'. While pulse grain such as whole grain, Rajama etc which are directly sold in primary market with little or no processing at farm level are regarded as "Agricultural Produce'. Before we decide that whether goods mentioned in Annexure A fall under category o\' agricultural produce or not they should be analyzed on basis of the following points: (a) Are the goods mentioned in A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in essential characteristics. Hence goods mentioned in Group B do not fall under the definition of "Agricultural Produce'. Annexure A (Group C) Tamarind :- Tamarind when harvested from tree consists of brittle outer shell which encapsulates the pulp and enclosed seed which in turn are sold by farmer in primary market. Shelling and removal of seeds to obtain the pulp is usually done by specially designed machines. Hence inner pulp without shell and seeds do not fall under the definition of Agricultural Produce' as it loses its essential characteristics. Annexure A (Group D) Dry mango ( Sukha Amchur) is obtained after processing green/raw mango( Kacchi Karrie). Kathodi (Sukhi Kathodi) is obtain after processing green kathodi, Dry Cooseberiy (Sukha Amla) is obtained from processing of green Gooseberry (Kucha Amla). Dry Water Caltrop/Water Cashewnut (dry Singadha) is processed into Sukha Singadha from Hara/Gila Singhda , Dry Peas (Sukha Matar) is obtain from processing of green peas (Hara matar). Green/raw mango, green kathodi. kachha amla. gila Singhada. hara Matar arc harvested by farmer fresh and brought to primary market(mandis) from where its bought by traders/processo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pop (Phool/Tal Makhana) etc. Dry fruits as the name suggests, is obtained by drying of fresh fruits or other plain products. All of them are harvested and sold in primary market by Cultivator as raw and green . These are then purchased by traders and processors who undertake a very specific . time consuming process such as cleaning, deshelling, specialized drying, sorting, grading, packing etc. Products mentioned in Group G are processed by which the loose their essential characteristics Hence do not fall under category of Agricultural Produce. 9. In view of the forgoing. we rule as under :- RULING Taxability of the supply of Cold Storage services in respect of goods as mentioned under Group A to Group G in the application for Advance Ruling tiled by M/s Sardar Mai Cold Storage & Ice Factory , H-141,142,150, Malviya Industrial Area, Malviya Nagar, Jaipur is as follows :- 1. Goods mentioned under Group A fall under the definition of Agricultural Produce in terms of the aforesaid notification and so supply of cold storage service in relation to these is exempt from the levy of GST . However if and processing is done on these products as is not usually done by a cultivator ..... 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