Agricultural produce under GST depends on processing level, determining NIL-rate support service eligibility for storage and warehousing.

Agricultural produce under the GST notification covers cultivation or animal-rearing goods that undergo only ordinary processing without altering essential characteristics and only to the extent needed for primary-market sale. Applying that test, whole pulse grains, cereals without processing, groundnuts with shell, and turmeric or ginger subjected only to customary primary processing were treated as agricultural produce. De-husked or split pulses, jaggery, processed dry fruits, processed spices, processed turmeric and ginger, tamarind after processing, shelled groundnuts, groundnut seeds and copra were treated as outside the definition. The GST circular on warehousing of agricultural produce was also relied upon, with eligibility for NIL-rate support services depending on the nature and extent of processing.

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Issues: Whether the specified commodities, including pulses, cereals, jaggery, dry fruits, groundnuts, turmeric, ginger, copra and tamarind, fall within the definition of "agricultural produce" under the relevant GST notification so as to qualify for NIL-rate support services for loading, unloading, packing, storage or warehousing.

Analysis: The notification defines "agricultural produce" as produce of cultivation or animal rearing on which no further processing is done, or only such processing as is usually done by a cultivator or producer and which does not alter the essential characteristics but makes the goods marketable for the primary market. Applying that test, de-husked or split pulses, jaggery, processed dry fruits, processed spices, processed turmeric and ginger, tamarind after processing, shelled groundnuts, groundnut seeds and copra were held to fall outside the definition. By contrast, whole pulse grains, cereals without processing, groundnuts with shell, and turmeric or ginger with only ordinary primary-market processing were treated as agricultural produce. The clarification in the GST circular on warehousing of agricultural produce was also relied upon.

Conclusion: The commodities were classified partly as agricultural produce and partly as non-agricultural produce for GST purposes, depending on the nature and extent of processing.

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