Gujarat AAR Grants GST Exemption on Raw Isabgol Seeds

The Gujarat Authority for Advance Ruling (GAAR), in Advance Ruling No. GUJ/GAAR/R/2026/21 dated 29 May 2026, has held that raw, natural and unprocessed Psyllium Seeds (Isabgol), when procured directly from farmers through APMC auctions, qualify as fresh medicinal plant products under HSN 1211 and are fully exempt from GST.

The Tribunal recently stepped in to clear up a tax question for Akshar Traders (owned by Jigneshkumar Narayandas Patel) in Sidhpur, Patan. The business had asked for clarification on how to classify raw, unprocessed Isabgol (psyllium) seeds for Goods and Services Tax (GST) purposes when they are bought and sold through regulated agricultural market yards.

The applicant is a registered APMC commission agent who buys and sells wholesale Psyllium Seeds. They purchase these seeds directly from farmers through auctions and sell them in their exact natural state. The goods are never processed in any way—meaning no drying, crushing, chemical treatments, or preservation are ever applied after harvest.

It was further stated that clarification was sought on whether such supplies would fall under the exemption entries relating to fresh medicinal plant products or alternatively under seed-quality goods eligible for exemption under the relevant GST notification.

The Authority observed that classification under GST must be determined based on the essential character of the goods at the time of supply, particularly whether any manufacturing or processing alters their natural identity.

On merits, GAAR noted that Psyllium Seeds are widely used in pharmaceutical and wellness applications due to their natural laxative and dietary fibre properties. Since the goods are traded in their raw, unprocessed state immediately after harvesting, they fall within the scope of “plants and parts of plants (including seeds and fruits) of a kind used primarily in pharmacy” under HSN 1211.

The Authority therefore held that the supply squarely falls under Entry 87 of Notification No. 10/2025–Central Tax (Rate), making it eligible for full exemption from both CGST and SGST. Having accepted classification under HSN 1211 as determinative, the Authority did not proceed to examine the alternate claim regarding seed-quality classification under Entry 77.

Thus, GAAR ruled that raw and unprocessed Isabgol seeds are fully exempt from GST when supplied in their natural form without any industrial processing.

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