CA Umesh Sharma
Arjuna (Fictional Character): Krishna,what is the recent order issued by the Maharashtra Appellate Authority for Advance Ruling for Goods and Service Tax against Advance ruling No. GST-ARA-108/2019-20/B-115 dated 22.12.2021?
Krishna (Fictional Character) :Arjuna, the Maharashtra appellate Authority for advance ruling for goods and service tax has issued order No. MAH/AAAR/AM-RM/07/2022-23 regarding the taxability of services provided by commission agent in relation to supply of turmeric to traders in APMC.
Arjuna(Fictional Character): Krishna, what is the taxability of turmeric for farmers?
Krishna(Fictional Character): Arjuna, the recent order held that turmeric is brought to the market by the farmers for sale, certain post-harvest processes like boiling, drying and polishing which are usually carried out by farmers themselves on the fresh turmeric harvested from the farmland. The said processes are carried out by the farmers themselves on their farmland only in order to make their product more sustainable non-perishable, marketable for the primary market.Thus, it is clear that dried turmeric(whole) isa produce out of cultivation of plant and the said post harvesting process on raw turmeric does not alter the essential characteristics of the turmeric. Thus, turmeric (turmeric in whole form- not in powder form) iscovered under the definition of ‘Agriculture Produce’. The HSN code of the turmeric is 0910 30 20 and the rate of GST is 5% (2.5% each of CGST and SGST). However, the first supply of turmeric (turmeric in whole form- not in powder form)by farmers, being supply by non-taxable person is not liable to GST.
Arjuna (Fictional Character): Krishna, what is the taxability of turmeric for commission agent?
Krishna(Fictional Character): Arjuna, Services by any agricultural produce marketing committee or board or services provided by commission agent for sale or purchase of agricultural produce in primary market comes under agricultural services. Also, APMC Market where turmeric is sold by farmers is nothing but primary market. Hence, services rendered by commission agent for supply of turmeric in APMC being agricultural produce is not liable to GST.
Arjuna(Fictional Character): Krishna, what one should learn from this?
Krishna(Fictional Character): Arjuna, many a times law is not clear on applicability of GST. Some of the authorities were unfavourable to the taxpayer while giving decision on certain issues. However, the above stated order of turmeric gives clarity and to the point approach for taking decision to the taxpayer on taxation of Agriculture produce in GST.
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