Taxability of income earned by primary agricultural society

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This query is : Resolved

Lakshmi Narayana (Querist)

29 January 2018 Income earned through sale of fertilizers and interest income on crop loans is taxable under GST,
if taxable HSN code for the same.

CA Suresh Jain

CA Suresh Jain (Expert)

30 January 2018 The supply of Fertilizers is taxable. HSN Chapter is 31 except micronutrients covered under Chapter 28. Interest is exempted.

Lakshmi Narayana

Lakshmi Narayana (Querist)

14 February 2018 sale is to farmers who are unregistered then also gst required to be paid ?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

26 July 2025 Great question! Here’s the GST treatment on your query about **primary agricultural society**:

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### GST on Sale of Fertilizers by Primary Agricultural Society

* **Sale of Fertilizers**: Fertilizers are generally **taxable under GST**.

* Most fertilizers fall under **HSN Chapter 31**.
* Some micronutrients may be under **Chapter 28**.

* **Interest on Crop Loans**: Interest income is **exempt from GST** as per the law (financial services are mostly exempt).

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### GST liability when selling to unregistered farmers:

* Even if the buyer (farmer) is **unregistered**, the **supplier (primary agricultural society)** is required to **pay GST on sale** if its turnover exceeds the threshold limit (Rs. 20 lakhs or Rs. 40 lakhs depending on state).

* The transaction is a **supply under GST**, so tax is payable by the supplier.

* Buyer’s registration status **does not affect supplier’s GST liability**.

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### Summary

| Transaction | GST Treatment |
| ---------------------------- | --------------------------- |
| Sale of Fertilizers | Taxable (HSN Chapter 31/28) |
| Interest on Crop Loans | Exempt |
| Sale to unregistered farmers | GST payable by supplier |

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If you want, I can help you with GST rates applicable or filing compliance for such societies. Need help with that?

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