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TMI Blog2024 (2) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... out of cultivation (emphasis added) of plants for food, fibre, raw material on which either no further processing is done or such processing is done as is usually done by a cultivator or producer (emphasis added) which does not alter its essential characteristics but makes it marketable for primary market. Additionally, Circular No. 16/16/2017-GST dated 15.11.2017 clarifies that dehusked or spilt pulses are not agricultural produce. The activities of loading/unloading/storage by the cultivator/producer of such agricultural produce have been granted exemption from the levy of tax in the cited notifications. Further, it is observed that there is an absence of substantiating evidence suggesting that the products had not been altered or had not undergone any changes in the overseas, by any entity other than the producers or cultivators, prior to their importation into India. It, therefore, is evident that when products are imported, their primary market is situated on foreign shores. However, after enduring multiple value additions and sales, the goods when imported into India, forfeits the quality to be considered as marketable for primary market . Consequently, these go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents from your applicant is in violation to the Notification No. 12/2017 dated 28.06.2017 serial No.3? (ii) Whether the services in relation to loading and unloading of imported unprocessed toor and whole pulses and black matpe are agricultural produce or not and covered under the circular No. 16/16/2017 GST dated 15.11.2017 and the Circular is binding or not? 4. While passing the advance ruling, reliance was placed by the Authority on the fact that in the definition of agricultural produce there is no clarity on the term primary market. The ruling, relying on agricultural marketing concept and definition (Jawaharlal Nehru Krishi Vishwa Vidyalaya) held that primary markets in relation to agricultural produce are located in towns near the centres of production of agricultural commodities. Transactions, according to the ruling, in these markets usually take place between the farmers and primary traders. Reliance was also placed on the judgement in the case of T.P. Roychowdhury and Co. (P) Ltd., reported in (2020) 113 taxman.com 100/2020 (32) GSTL 661 (AAR), wherein the West Bengal Appellate Authority had held that primary market for such imported products is located ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als regarding taxing on agricultural produces. It was prayed by the appellant that the order dated 30.05.2023 is required to be annulled as it is devoid of the true spirit of the said notification and in violation of the principles of natural justice. 8. The appellant has further stated that the said Authority had acted illegally and without and / or in excess of jurisdiction to pronounce a ruling which, as admitted by the representative of the Revenue, could not be expressed without physical verification of samples of imported items. It has been submitted that it was apparent from the face of the order that the officer concerned for the revenue has expressed his views without making any physical verification of samples of imported items and that the exact taxability or exemption of the related services like loading and unloading was not possible to ascertain and as such the ruling dated 30.05.2023, which has been passed relying upon the submissions of revenue is erroneous and liable to be quashed. 9. The appellant has further added that the said authority was unjust, unfair, unreasonable, unlawful and had utterly violated the principles of natural justice to bifurcate agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Appellant, the said authority in its order had not discussed nature and type of the documents produced by the appellant and has ignored the clarifications and submissions made and could have asked for the invoices/bills in respect of the services relating to unprocessed toor and whole pulses and black matpe from the farmers of foreign land to Indian market for comparative and judicious analysis. 12. The Appellant craved leave to rely on and refer to further grounds along with documentary evidence at the time of hearing of the instant Appeal. Personal Hearing: 13. During the course of hearing held on 27.09.2023, the Appellant s authorised representative reiterated the points as stated in the Grounds of Appeal. The matter has been examined and written and oral submissions made before us are considered. 14. The Appellant subsequently had submitted Samples of Black Matpe, Red Lentil and Analysis Report of Black Matpe, Toor Whole and Red Lentil vide their letter dated 03.10.2023. 15. This Appellate Authority asked the appellant vide its mail dated 21.11.2023, (i) Whether the samples were drawn from the import consignments in question; (ii) Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of samples of imported items, the exact taxability or exemption of the related services like loading and unloading is difficult to ascertain; (ii) as evident from the documents such as photocopies of bill of lading and bill of entry for home consumption the goods have been imported from outside the country, hence, the impugned goods were cultivated in a foreign country and subsequently imported into India; (iii) the expressions makes it marketable for primary market in the definition of agricultural produce bears a significant importance, the term primary market has not been defined in the GST Act, however, on the basis of location of place of operation, such markets in relation to agricultural produce are located in town near the centres of production of agricultural commodities. In these markets, a major part of the produce is brought for sale by the producer farmer themselves. Transactions in these markets take place between the farmers and primary traders. The contents of Agricultural Marketing: Concept and definitions from the website of Jawaharlal Nehru Krishi Vishwa Vidalaya was relied upon by the revenue. 17.3 We have considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduce. 17.4 The revenue, though had submitted that without physical verification of samples of imported items, the exact taxability or exemption of the related services like loading and unloading is difficult to ascertain but also, has emphasised in their submission that in the instant case the impugned goods were cultivated in a foreign country and subsequently were imported into India. We have also taken into account the Revenue s submissions made before the WBAAR and recorded in the Order dated 30.05.2023, which inter alia states that the expressions makes it marketable for primary market in the definition of agricultural produce bears a significant importance. 17.5 We further find that the term Primary Market has not been defined in the GST Act. The WBAAR has relied on the definition provided in the website of Jawaharlal Nehru Krishi Vishwa Vidyalaya, which inter alia says that on the basis of location or place of operation, primary markets in relation to agricultural produce are located in towns near the centres of production of agricultural commodities. In these markets, a major part of the produce is brought for sale by the producer-farmers themselves. Transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of tax in the cited notifications. 17.11 Also, once a product attains initial marketability for the primary market, any subsequent value addition/operations and/or sales on the secondary market disqualify it from meeting the criteria for Agricultural Produce in terms of the notifications and circular, quoted supra. Prior to their exportation to India, pulses originating from overseas must have undergone an extensive series of processing procedures, such as winnowing, cleansing, packaging, labelling, and various exchanges of ownership and value enhancements. Further, after importation, the pulses also undergo process of Fumigation, Plant Quarantine and FASSAI compliance procedure. These processes, therefore, render the imported pulses disqualified to be treated as Agricultural Produce , even for undehusked and whole pulses. 17.12 Besides, the packaged foodgrains, that are completely processed and sanitised upon importation, will in all probability never reach the primary market in India. Instead, they will likely be acquired by wholesalers, who will repackage and distribute the pulses to retailers. 17.13 Furthermore, it is observed that there is an absence of substant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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