Cotton seeds would not be covered under definition of agricultural produce being obtained after processing in mills: AAR

Case Details: Authority for Advance Rulings, Punjab Ahuja Industries, In re - [2022] 144 taxmann.com 176 (AAR-PUNJAB)

Judiciary and Counsel Details

• • Varinder Kaur & Viraj Shyamkarn Tidke, Member
  • S.L. Goyal, Adv. for the Appellant.

Facts of the Case

The applicant was providing GTA services and receiving cotton Seeds (Banaula) for transportation. It filed an application for advance ruling to determine whether cotton seeds would be covered under definition of agricultural produce and their transportation would be exempted as per exemption Notification No. 12/2017-Central Tax (Rate).

AAR Held

The Authority for Advance Ruling observed that cotton seed is one of items listed in Schedule to Punjab Agriculture Produce Markets Act, 1961 (PAPM Act) providing for items that qualify as agricultural produce. However, the definition of ‘agricultural produce’ is different under GST law and PAPM Act. The cotton seeds are a result of processing undertaken in mills and can’t be said to be agricultural produce as per definition of agricultural produce given in exemption notification. Therefore, the services provided by GTA in relation to transportation of cotton seeds in a goods carriage would not be exempted under GST.