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TMI Blog2018 (11) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of referred Notification is for services of Commission agents. which is peged at 18% GST (9+9). However, applicant being a Commission Agent dealing in sale and purchase of agricultural produce (tobacco leaves) - Sl.No. 24 of the Notification having NIL rate of Tax is applicable on them. Registration - Held that:- Section 23 of CGST Act stipulates that a person who is exclusively supplying exempted services shall not be required to take Registration. Ruling:- As per entry No:24 Notification No:11/2017-Central Tax(Rate) dated : 28.06.20J7, Commission agent dealing with agricultural produce like tobacco attracts Nil rate of duty. The reverse charge provision has not been notified yet. The tobacco leaves received from trader in an auction is exempted from GST. Commission Agent receives tobacco from farmers and sell them within the state - Held that:- As the above service is exempt from tax by the entry No:24 of Notification No: 11/2017-Central Tax(Rate). hence. the commission agent is not liable to collect GST. - AAR/AP/03(GST)/2018 In Application No. 06/AAR/GST/2018 - - - Dated:- 8-6-2018 - SRI. J.V.M SARMA AND SRI. AMARESH KUMAR, MEMBER Present for the Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for admitting the application and to pronounce the advance ruling. Accordingly, a personal hearing was fixed on 04.04.2018. In response to the notice, Sri.Vallabhaneni Mohana Rao, authorized representative on behalf of the applicant, had attended and made oral submissions, and submitted a copy of procurement invoice and also a copy of sale invoice. For the purpose of advance ruling, the applicant has to pay ₹ 5,000/- as fee against CGST and ₹ 5000/- as fee against APGST (A total of ₹ 10000/-)(as prescribed in the respective Acts), but the applicant had initially paid ₹ 5000/- against SGST only with CPIN 18033700030030, dated : 14.03.2018 and mentioned the same in their application i.e ARA-01, after an intimation to the applicant about the same, he had paid the fee under CGST on 20.03.2018 with CPIN 18033700073365, and submitted the copies of payment receipts at the time of personal hearing. Due verification made, the material on record i.e copies of invoices, raised by the applicant on receipt of the goods towards the owner of the goods along with the letter of the owner(farmer) of the goods, and the invoice raised against the recipient of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess; Sec. 24 . Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act (vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise; Section 7(1) For the purposes of this Act, the expression supply includes:- (c) the activities specified in Schedule I, made or agreed to be made without a consideration. According to Schedule I of CGST / AP GST Act,2017, activities to be treated as supply even if, made without consideration. 3. Supply of goods- (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal. And as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reshold limit i.e Rs,20 lakhs. Issue. No.2 In case, there is GST in the above situation, who has to pay the tax? Ruling : Not Applicable with reference to the first question. Issue. No. 3 Will reverse charge provisions applicable for tobacco leaves or not? Ruling: As per S.No. 3 of Notification 04/2017 - Central Tax (Rate), Dated :28 th June 2017, Reverse Charge is applicable on tobacco leaves on receipt of the goods. by a registered person from agriculturist. Issue. No.4 Who has to pay GST when commission agent sell the tobacco leaves received from trader in an auction? Can commission agent collect GST from buyers and pay or not? Ruling : The transaction referred to in falls under acting as an agent on behalf of other taxable persons, who makes taxable supply of goods as an agent. As per clause VII of Section 24 of CGST/ APGST Act 2017, the Commission Agent has to get registered under the Act and has to pay GST when sell the tobacco leaves received from trader in an auction, and can collect GST from buyers. Issue.No.5 The Commission Agent receives tobacco from farmers and sell them within the state. He takes commission from farmers for his se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST based on above facts. The Notification No: 11/2017-Central Tax(Rate) dated : 28.06.2017 notifies the rate of Central Tax on supply of various services. Against Sl. No. 24 of the referred Notification, the rate of tax is NIL The relevant extract is reproduced hereunder: (i) Support services to agriculture, forestry, fishing, animal husbandry. Explanation . Support services to agriculture, forestry, fishing, animal husbandry mean (i) 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 of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9+9). However, applicant being a Commission Agent dealing in sale and purchase of agricultural produce (tobacco leaves), I find Sl.No. 24 of the Notification having NIL rate of Tax is applicable on them. 4. AS far as Registration is concerned, Section 23 of CGST Act stipulates that a person who is exclusively supplying exempted services shall not be required to take Registration 5. In view of above discussion and findings, I answer the questions of the applicant as under: Issue. No.1 Will GST be applicable on sale of tobacco leaves received from farmers made by Commission Agent in an auction and his turnover is less than ₹ 20 Lakh? As per entry No:24 Notification No:11/2017-Central Tax(Rate) dated : 28.06.20J7, Commission agent dealing with agricultural produce like tobacco attracts Nil rate of duty Issue.No.2 In case, there is GST in the above situation, who has to pay the tax? Not Applicable Issue.No.3 Will reverse charge provisions applicable for tobacco leaves or not? The reverse charge provision has not been notified yet. Issue.No.4 Who has to pay GST when commission agent sell the tobacco leaves received from trade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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