2019 (4) TMI 1497 - AAR - GST

Cooperative society exempt from GST on agricultural services & pulses; 5% GST on oilseeds. No TDS required.

In Re: Rajasthan Rajya Sahakari Kriya Vikraya Sangh Ltd.

The Authority for Advance Ruling (AAR) confirmed that a cooperative society is exempt from charging Goods and Services Tax (GST) on services provided for ... Levy of GST - service for procurement of agricultural produce i.e. oilseeds and pulses from farmers either itself or through Kray Vikray Sahakari Samiti on behalf of its principal - outward supplies of goods as well as services after having procured through Krah Vikrah, Sahakari Samiti according to the purchase order of the NAFED - Deduction of TDS from payment to or credit of KrahVikrah, Sahakari Samiti/RAJFED under Notification No. 50/2018-central tax dated 13.09.2018 - Deduction of TDS from payment to or credit of RAJFED under Notification No. 50/2018-Central Tax dated 13.09.2018. Levy of GST - service for procurement of agricultural produce i.e. oilseeds and pulses from farmers either itself or through Kray Vikray Sahakari Samiti on behalf of its principal - HELD THAT:- The key ingredient for determining relationship under GST would be whether the invoice for the further supply of goods on behalf of the principal is being issued by the agent or not - In the instant case, the applicant issues an invoice in his name for further supply to a buyer/ purchaser (as directed by the Principal i.e. NAFED), therefore, this activity is a supply of goods in terms of Schedule I of the Central Goods and Services Tax Act, 2017, and attracts GST as applicable (the supply of goods by an agent on behalf of the principal without consideration has been deemed to be a supply). Levy of GST - outward Supply of pulses (without any brand name) - HELD THAT:- The applicant is not liable for charging RGST/CGST or IGST on outward supply of pulses (without any brand name) through Krah Vikrah, Sahakari Samiti as the same is exempted under Notification No. 02/2017-Central Tax (Rate) dated 28.06.2017 in accordance to section 11 (1) of CGST Act, 2017. Levy of GST - outward Supply of oilseeds (other than of seed quality) - HELD THAT:- The applicant is liable for charging RGST/CGST or IGST on outward supplies of oilseeds (other than of seed quality) made through Krah Vikrah, Sahakari Sarniti and the same attracts GST@50/0 (SGST 2.5% + CGST 2.5%) under Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 in accordance to section 11 (1) of CGST Act, 2017. Deduction of TDS from payment to or credit of KrahVikrah, Sahakari Samiti/RAJFED under Notification No. 50/2018-central tax dated 13.09.2018 - HELD THAT:- As the applicant is not covered under Notification No. 50/2018central tax dated 13.09.2018 read with Section 51 of CGST Act, 2017 and is therefore not liable to deduct Tax at Source (TDS) from payment to or credit of KrahVikrah, Sahakari Samiti/ RAJFED. Deduction of TDS from payment to or credit of RAJFED under Notification No. 50/2018-Central Tax dated 13.09.2018.- HELD THAT:- As the applicant is not covered under Notification No. 50/2018-Central Tax dated 13.09.2018 read with Section 51 of CGST Act, 2017 and is therefore not liable to deduct Tax at Source (TDS) from payment to or credit of KrahVikrah, Sahakari Samiti /RAJFED for their services of procurement of gunny bags, transportation, insurance and services of surveyors for the applicant to be supplied by the applicant to its principal NAFED itself. Issues Involved:1. Liability of Goods and Services Tax (GST) on services for procurement of agricultural produce.2. GST applicability on outward supplies of goods and services.3. Liability to deduct Tax at Source (TDS) for services of procurement of agricultural produce.4. Liability to deduct TDS for services related to procurement of gunny bags, transportation, insurance, and surveyors.Issue-wise Detailed Analysis:1. Liability of Goods and Services Tax (GST) on Services for Procurement of Agricultural Produce:The applicant, a co-operative society, provides services to NAFED for procuring agricultural produce. The applicant argued that these services are exempt from GST as they fall under the category of services by a commission agent for agricultural produce. The Authority for Advance Ruling (AAR) confirmed this, stating that the applicant's services are exempt under Serial No. 54 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Thus, the applicant is not liable to charge GST on these services.2. GST Applicability on Outward Supplies of Goods and Services:- Pulses (Other than Branded): The AAR ruled that the outward supply of pulses (other than branded) by the applicant through Kray Vikray Sahakari Samiti is exempt from GST under Notification No. 02/2017-Central Tax (Rate) dated 28.06.2017.- Oilseeds (Other than Seed Quality): The applicant is liable to charge GST on the outward supply of oilseeds (other than seed quality) through Kray Vikray Sahakari Samiti. This supply attracts GST at the rate of 5% (SGST 2.5% + CGST 2.5%) as per Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.3. Liability to Deduct Tax at Source (TDS) for Services of Procurement of Agricultural Produce:The applicant questioned whether it is required to deduct TDS from payments to Kray Vikray Sahakari Samiti/RAJFED for services related to procurement of agricultural produce. The AAR concluded that the applicant does not fall under the categories specified in Section 51 of the CGST Act, 2017, and Notification No. 50/2018-Central Tax dated 13.09.2018. Therefore, the applicant is not liable to deduct TDS for these services.4. Liability to Deduct TDS for Services Related to Procurement of Gunny Bags, Transportation, Insurance, and Surveyors:Similarly, the applicant is not required to deduct TDS from payments to RAJFED for services related to procurement of gunny bags, transportation, insurance, and surveyors. The AAR ruled that the applicant does not meet the criteria specified in Section 51 of the CGST Act, 2017, and Notification No. 50/2018-Central Tax dated 13.09.2018, and thus, is not liable to deduct TDS for these services.Conclusion:The AAR provided a comprehensive ruling on all issues raised by the applicant. The applicant is exempt from charging GST on services provided as a commission agent for agricultural produce. Outward supplies of pulses are exempt from GST, while oilseeds attract GST at 5%. The applicant is not liable to deduct TDS for services related to procurement of agricultural produce or other associated services such as gunny bags, transportation, insurance, and surveyors.