No GST exemption on services of loading and unloading of imported pulses

The West Bengal Authority for Advance Ruling (AAR) has ruled that services involving the loading and unloading of imported, unprocessed pulses are not eligible for GST exemption. This is because the pulses, after import and before reaching the primary market or farmer, are not considered 'agricultural produce' as defined for exemption purposes. The ruling clarifies that processes like de-husking or splitting, often done by millers, remove them from the scope of agricultural produce exemption.

The AAR, West Bengal in the case of M/s Sona Ship Management Pvt. Ltd. [07/WBAAR/2023-24 dated May 30, 2023] ruled that,the services of loading and unloading of imported unprocessed pulses is not exempt under serial no.54(e) of the Notification No.12/2017-Central Tax dated June 28, 2017 ("the Service Exemption Notification") since the same cannot be considered as agricultural produce.

Facts

M/s Sona Ship Management Pvt. Ltd. ("the Applicant") is engaged in loading and unloading services at the Kolkata Dock Complex ("KDC") and is specialized in handling cargo such as food grain, fertilizers, coal, iron ore, break bulk/project cargo etc. the

Applicant has taken the services of Calcutta Dock Labor Board ("CDLB") for bringing the imported pulses as the said pulses were imported by using smaller ships to Kolkata Dock. 

The Applicant had submitted that the services provided by CDLB  to the importer for loading and unloading of imported unprocessed pulse  is covered under serial no.54(e) of the Service Exemption Notification.

The Applicant had filed theapplication seeking an advance ruling whether services of loading and unloading of unprocessed Toor and whole pulse and black matpe is eligible for exemption under serial no.54(e) of the Service Exemption Notification.

Issue

Whether services of loading and unloading of imported unprocessed Pulses is exempted under serial no.54(e) of the Service Exemption Notification ?

Held

The AAR, West Bengal in Ruling No.07/WBAAR/2023-24 held as under :

• Noted that, as per serial no.54 of the Service Exemption Notification services relating to the cultivation of plant, inter alia for agriculture produce are exempt and classified under SAC 9986.
• Further Noted that, the goods imported by the Applicant is not clear whether the pulses are whole pulse grain or de-husked or splitting pulses. 
• Opined that, Circular No. 16/16/2017-GST dated November 15, 2017 issued by CBIC clarifies that pulses (de-husked or split) are not considered as agriculture produce since the process of de-husking and splitting of pulses is usually not carried out by the farmers or at a farm level but by the pulse millers.
• Relied on the judgement of AAR, West Bengal in the matter of T.P. Roy Chowdhury and Co. (P) Ltd [2020] 32 GSTL 661, ruled thatthe term primary market in common parlance refers to farmers‟ market like "mandi" and the exemption is for the purpose of agricultural produce, the processes and services that are applied till the goods are at the farmer's hand to make it marketable for primary market.
• Held that, services of loading and unloading of imported unprocessed pulse does not qualify for exemption under serial no.54(e) of the Service Exemption Notification as the imported pulses are not agriculture produce and it is not come from the primary market.

Relevant Extract of the Service Exemption Notification

"Serial No.54(e)
loading, unloading, packing, storage, or warehousing of agricultural produce"