18% GST leviable on plantation of mangrove seeds & seedlings in coastal areas: AAAR
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- Last Updated on 12 January, 2023
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Case Details: Appellate Authority for Advance Ruling, West Bengal Raj Mohan Seshamani, In re - [2023] 146 taxmann.com 155 (AAAR-KOLKATA)
Judiciary and Counsel Details
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- Ashutosh Awasthi & Khalid Aizaz Anwar, Member
- Rip Das for the Appellant.
- Biswanath Purkait for the Respondent.
Facts of the Case
The appellant was engaged in business of cultivation, planting and nurturing of mangrove seeds and seedlings in coastal areas for environmental organizations with objective of environmental protection against cyclones and tidal waves in order to create sustainable development and livelihood for people. It filed an application for advance ruling to determine taxability of plantation of mangrove seeds and seedlings in coastal areas.
AAAR Held
The Authority for Advance Ruling (AAR) ruled that sole object of services would be to enhance biodiversity and re-establish ecosystem function to protect islands. Hence, this activity would be categorized under “environmental protection services” with Heading No.9994 and tax shall be levied at 18%. It filed appeal against the order of AAR and submitted that this activity should be covered under Serial No. 24 of Notification No. 11/2017- Central Tax (Rate) dated 28/06/2017 having SAC 9986 and therefore it shall attract Nil rate of tax.
The Appellate Authority for Advance Ruling observed that the aforesaid services provided by appellant would primarily be used for purpose of environmental protection and would not be related to cultivation of plants for food, fibre, fuel, raw material or other similar products. Therefore, there would be no infirmity in ruling pronounced by AAR that supply of services for plantation of mangrove seeds and seedlings in coastal areas would be covered under Serial Number 32 of Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017 having SAC 9994 and shall attract 18% GST.
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