9911796707
TMI Blog2021 (1) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... the drilling and hire service for agriculture , which the applicant classifies under SAC 9986 as Support services for agriculture . The contention of the applicant is that the borewells drilled provides the required quantity of water for cultivation of agricultural crops and the entry Sl.No.54 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 covers agricultural operations directly related to raising of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; the borewells drilled provides the required quantity of water for cultivation of agricultural crops.; the supply of compressors which becomes a part of the motor that pumps water is inseparable from the activity of cultivation and therefore is a Support service for agriculture . Provision of agricultural machinery with crew and operators and operation of irrigation systems for agricultural purposes are listed as Support services to crop production . In the case at hand the applicant does not undertake the operation of irrigation system for agricultural purposes and also compressors are not agricultural machinery. They undertake the activity of drilling of borewell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;Applicant') is registered under the GST vide GSTIN No. 33ABAFM0641E1ZY. They have sought Advance Ruling on the following questions: 1. Whether the following supply of services provided by the applicant are in relation to agricultural operations directly in connection with raising of agricultural produce: i. Drilling of Borewells for supply of water for agricultural operations like cultivation including seeding, planting and ploughing. ii. Letting out of compressors for pumping of water from the borewells to the agricultural fields. 2. If the answer to the above question is in the affirmative, whether the said services are covered by the entry Sl.No. 54 of Notification 12/2017 CT (Rate) dated 28.06.2017 The applicant has submitted the copy of the application in Form GST ARA-01 and also submitted a copy of challan evidencing payment of application fees of ₹ 5000/- each under sub-rule(1) of Rule 104 of CGST Rule 2017 and SGST Rules 2017. 2.1 The applicant has stated that they provide drilling of borewell services mainly to agriculturists engaged in raising of agricultural crops. Water is a part and parcel of essential requirements in cultivation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 raised on V.R. Muthu 86 Bro's, Ayanrediyapatti for 'Drilling Hire Charges' with CGST SGST under the description HSN 995434; iii. Invoice No. 19-20/06/022 dated 13.06.2019 raised on Anand Engineering Products Pvt Ltd., Kulithalai-Tk, Karur for 'Drilling Hire Charges' with Output CGST SGST under the description HSN 995434; iv. ITR Acknowledgement for the Assessment Year 2019-20 along with Memo of Taxable income for the A.Y. 2019-20; v. Profit Loss Account for the year ended 31.03.2019; vi. Balance Sheet as on 31.03.2019; vii. Invoice No. EX/18-19/034 dated 12.08.2018 raised on Shri. Ganesan, Villapatti, Iluppur for Drilling and Hire Charges for agriculture' under the Description HSN 9986 along with Letter dated 12.08.2018 of Shri. Ganesan addressed to the applicant stating the drilling of borewell in the agricultural land and that they intend to use well for agricultural purposes and document of Revenue Department to establish the ownership of the land with Shri. Ganesan viii. Invoice No. 26/08/18-19 dated 09.08.2018 raised on Sriram Chemicals for Drilling Hire Charges with CGST SGST under the description HSN 995434 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not a naturally bundled composite service. Therefore, it does not fall under the ambit of services covered under heading 9986. They have also stated that there is no show cause notice / issue pending adjudication in their office. 6. The Central jurisdictional authority vide their letter dated 13.08.2020 reported that there are no pending proceedings in the applicant's case on the issues raised by the applicant in their ARA application in their jurisdiction. 7. Further, the applicant vide letter date 05.11.2020, was asked to furnish the list of compressors which is being let out as required in the virtual hearing held on 13.08.2020 and the applicant has not furnished the said details. 15.1 We have carefully examined the statement of facts filed by the Applicant along with application, oral and written submissions made at the time of Virtual hearings and the comments/remarks of the Jurisdictional Authorities. We find that the applicant carries on the borewell drilling for Individual houses, Commercial and Industrial buildings and for agricultural purpose. They also let out compressor for agricultural purpose on lease. The applicant has sought ruling on the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Code(Tariff) Description of Services Rate (per cent.) Condition 54 Heading 9986 Services relating to cultivation of plants Nil Nil and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, caw 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 marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices to crop production'. In the case at hand the applicant does not undertake the 'operation of irrigation system for agricultural purposes' and also `compressors' are not agricultural machinery. They undertake the activity of drilling of borewells in the agricultural land and let out compressors. The said activity is not classifiable under SAC 9986. It is pertinent to note that even setting up of an irrigation system with pipe lines are classifiable only under SAC 9983 and the activity of 'operation' of such irrigation system alone is coded as 'Support service to agriculture'. In the case at hand, the applicant undertakes only drilling of bore wells in the agricultural land and are letting out compressors. The applicant are classifying the same under SAC 995434, when the said activity is undertaken in places other than agricultural land and under SAC 995434 when the drilling is done in other than agricultural land. SAC 995434 is extracted below: 995434 Water well drilling and septic system installation services This service code includes i. special trade construction services involving drilling or digging water wells, installati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
