Seeds not to be covered under agricultural produce for GST: AAR

Case Details: Authority for Advance Rulings, Telangana M. Narasimha Reddy & Sons, In re - [2022] 138 taxmann.com 95 (AAR-TELANGANA)

Judiciary and Counsel Details

• • B. Raghu Kiran & S.V. Kasi Visweswara Rao, Member

Facts of the Case

The applicant was engaged in business of production and processing of agricultural seeds. It filed an application for advanced ruling to determine whether cleaning, drying, grading and treatment with chemicals by the applicant would be exempt from payment of GST.

AAR Held

The Authority for Advance Ruling observed that seed and grain are not one and the same. The law applicable to grain and seed will be different and therefore concessions applicable to grain produced by a cultivator will not be applicable to seed. In the instant case, the applicant was supplying goods which are produce of cultivation of plants. However they are of seed quality and not grain, therefore they are not meant for food, fibre, fuel or raw material for further processing. Moreover, the processing done to turn grain into seed quality goods would be different from the processing done by a cultivator or producer of grain for primary market i.e., agricultural mandi or agricultural market yard. Therefore, the seed quality goods produced can’t be treated as agricultural produce and storage, loading, unloading & packing of seeds and undertaking processes like cleaning, drying, grading and treatment with chemicals would not be exempt from GST.

List of Cases Reviewed

• • Godfrey Philips India Ltd. v. State of U.P. [2005] 139 STC 537 (SC) (para 7) followed.

List of Cases Referred to

• • Godfrey Philips India Ltd. v. State of U.P. [2005] 139 STC 537 (SC) (para 7).