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TMI Blog2019 (8) TMI 1629X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the applicant fall under the description of the services covered under point (g) of heading 9986 mentioned at Serial No. 54 i.e. services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. As per the definition contained in Notification No. 12/2017 CT (Rate) dated 28.06.2017, 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 but makes it marketable for primary market - The Circular No. 57/31/2018-GST dated 04th September, 2018 elaborately deals with the scope of Principal-Agent relationship discussed. Although this circular defines the Principal-Agent relationship in the context of Schedule I appended to CGST Act but, it throws light on the Principal-Agent relationship in general. It deals with certain scenarios describing as to when a person can be taken to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled as Primary Market. Thereafter, agricultural produce is traded further and changes hands between the stockiest, traders, industries, importer or exporters etc. 2.3 The applicant only facilities the execution of trade and never deal with the goods and the purchase and sales transactions are independent between buyer and seller and once the contract is executed, the brokerage becomes due and the service is completed. The Notification No. 11/2017 provides for nil rate and 12/2017 dated 28.06.2017 provides for exemption, of services provided by commission agent in relation to sale and purchase of agricultural produce. 3. Applicant's interpretation of law and facts: a. As per section 2(5) of GST Act, agent means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on the behalf of another; b. Section 2 (13) of IGST Act defines Intermediary as a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... torage or warehousing of agricultural produce; (f) Agricultural extension services; (g) Service by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. Nil Nil 4. Based on its submissions and interpretation of law, the applicant is of the view that: a. Broker is an intermediary and not an agent. b. Broker is dealing on principal to principal basis and does not supply goods on behalf of principal. c. Broker services had no relation with cultivation of plant and it merely helps in facilitation of purchase and sales. d. The services provided by the applicant is not covered in exemption notification and liable to charge the tax. 5. Question on which Advance Ruling is sought: 5.1 Whether the services of supplier are exempt in purview of exemption notification no 12/2017 (CT Rate) dated 28.06.2017. 6. Discussion: 6.1 The applicant firm Mcdonald Pelz Global Commodities India Private Limited is engaged in provisions of brokerage/ intermediary services in relation to sale and purchase of commodit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall have the same meaning as assigned to them in those Acts. As per the definition contained in Notification No. 12/2017 CT (Rate) dated 28.06.2017, 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 but makes it marketable for primary market. The Circular No. 57/31/2018-GST dated 04th September, 2018 elaborately deals with the scope of Principal-Agent relationship discussed. Although this circular defines the Principal-Agent relationship in the context of Schedule I appended to CGST Act but, it throws light on the Principal-Agent relationship in general. It deals with certain scenarios describing as to when a person can be taken to be acting as an agent on behalf of his principal and when not. Scenario 1 is reproduced as under: Mr. A appoints Mr. B to procure certain goods from the market. Mr. B identifies various suppliers who can provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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