No GST Exemption on services of loading, unloading or warehousing of imported agriculture products

PUDUCHERRY AUTHORITY FOR ADVANCE RULING

The Relevant Text of the Order as follows :

4. The following submissions were made by the applicant:

4.1. They have interalia stated that the service of loading, unloading, packing, storage or warehousing of such agricultural produce, is covered under Sl.No.S4 (e) under heading 9986 of Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 and that the Sl.No.54(e) under heading 9986 of Notification No.12/2O17 – Central Tax (Rate) dated 28.06.2O17 reads as follows:

” Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel raw material or other similar products or agricultural produce by way of —–

(a)……

(b)…….

(e) loading, unloading, packing, storage or warehousing of agricultural produce;

(f)….

(h)…… :

and that the said services provided towards the agricultural produce is covered under the said exemption notification and the same would be applicable to them (applicant) also, as the notification is not restrictive only to the direct importer / trader / cultivator of the agricultural produce.”

4.2. The applicant have cited reference of the Advance Ruling of Andhra Pradesh vide Order No. AAR/API02/(GST)/2O18 in the case of S.S.S.V.K Cold Storage (P) Ltd., and have stated that AAR in the said case has accepted the applicant’s claim of applicability of exemption under Notification No.l2/2O17 Central Tax (Rate) dated 28.06.2O!7 under Entry No.54(e) for both farmers and also traders.

4.3. The applicant have cited the above Ruling and also on their interpretation of Notification No.12/2017, have filed that the service provided by them to any traders/importers of agricultural produce with respect to the loading, unloading, packing, storage or warehousing services of such agricultural produce, are also covered under the exemption Notification 12/2O17 Central Tax (Rate) dated 28.06.2017 under Entry No.54 (e).

4.4. The authorised signatory for the applicant Shri. K. Balaji, General Manager attended the personal hearing on 14.11.2019 and furnished copies of agreement entered into by them with the importers (service recepient), Sample invoices raised by M/s. KKPL, Bill of Entry of their recepients (for import of milling wheat in bulk).

SOME OF DISCUSSION AND FINDINGS

5. On perusal of the Notification 12/2O17 Central Tax (Rate) dated 28.06.2017, it is clear that for getting eligibility for exemption under Sl.No.54 (e) covered under Heading 9986 the services of loading, unloading, packing, storage or warehousing have to fulfil the conditions mentioned therein i.e. the services need to be relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel raw material or other similar products or agricultural produce.

5.1. It is further seen that the term “agricultural produce” has been defined in the same said Notification as below:

“(d) “agricultural produce” means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market; “

5.2. Thus, from the above it could be seen that the said services of loading, unloading, packing, storage or warehousing rendered by a taxpayer can be eligible for exemption only if they are rendered for the above purposes as clearly defined in the Notification i.e. only if the services are extended till the products are taken to primary market for disposal and as a corollary any services extended beyond the stage of primary market are not eligible for classification under the Service Accounting Code 9986 and hence cannot be considered for exemption under the said Notification.

5.3. Even though the term Agricultural Produce has been defined in the Notification / GST Act, the term “Primary Market’ has not been defined so however the term Primary Markets in common parlance generally means and include as a platform or a place, like a mandi, where the farmers are directly selling to the buyers and these are located in rural and interior areas and serve as focal points to a great majority of the farmers.

5.4. In the instant case in hand, from the copies of documents viz. the Bill of Entries, the invoice raised for supply of services and the agreements it could be seen that the applicant supplies the services of loading, unloading, packing, storage or warehousing after the cargo of ‘milling Wheat in bulk’, imported from foreign countries, reaches the port. It could be seen that the produce i.e. ‘wheat’in this case has been procured from the farmers in the foreign countries and exported to India.

The Question and Ruling as follows :

Whether exemption provided in Sl. No.54(e) under Heading 9986 of GST Notification No.12/2017-Central Tax (Rate) dt.28.06.2017 applies while rendering services such as loading, unloading, packing, storage or warehousing of imported agriculture products including wheat, to any importer or trader.

RULING

In view of the above we pass the following ruling:

1. The services of loading, unloading, packing, storage or warehousing rendered by the applicant after the cargo of ‘Wheat’ imported from a foreign country, reaches the Karaikal Port, are not eiigible for the Exemption provided in Sl.No.54(e) under Heading 9986 of the Notification No. 12/2O17 – Central Tax (Rate) dated 28.06.2017.

2. The instant application stands disposed of accordingly.

3. The applicant or the jurisdictional officer, if aggrieved by the ruling given above, may appeal to the Puducherry State Appellate Authority for Advance Ruling under Section 100 of the Puducherry GST / CGST Act, 2Ol7 within 30 days from the date of receipt of the Advance Ruling.