GST on Nursery Income

[KUNAL DESAI]

I need an opinion for nursery income for following transactions.

1) Selling of Live Plants

2) Selling of Fruits & Vegetables

3) Selling of Live Plants along with Ceramic Pots

[YAGAY and SUN]

Selling of Live Plants - Nil rate of GST (Chapter 6)

Selling of Fruits & vegetables - Nil rate of GST (Chapter 6)

Selling of Live Plants along with Ceramic Pots - 18% (Chapter 69)

[Pavan Mahulkar]

Transaction No.3

May turn out as a Composite Supply & supply of live plant being predominant Supply, the supply will be exempted..(NIL Rated)

(Presuming that the live plant is attached in the pot)

[YAGAY and SUN]

It would be better to collect tax and pay to exchequer in relation to Point No. 3, as GST Department may raise objection and matter is prone to litigation as value of Ceramic Pots are always on higher side than of cost of the live plant.

[KUNAL DESAI]

Then it way better to sell pot and plant separately.

[KASTURI SETHI]

I agree with all the views of M/s. Yagay And Sun, Sirs on the issue. In my view, it is not a situation of naturally bundled.

If anyone has any doubt, approach to Advance Ruling Authority.

[Ganeshan Kalyani]

Yes, it is better to pay tax on point no.3.

[TANAY GHILDIYAL]

The 3rd point will be fully covered in Nil rated Suppy since Ceramic Earthen pot and clay lamps are Nil Rated in HSN Code 69120040.

The Selling of live Plants along with Ceramic Pots is not a naturally bundled supply since both can be sold separately. Since both attract Nil rate hence this will be a Nil rated supply.

It should be noted that Selling of Live Plants along with Plastic Pots should be checked for GST purpose as it would most probably not be Taxed at Nil Rate

AI Summary

GST on nursery supplies: classification of plant and produce sales can determine exempt or taxable treatment, check packaging.
Live plants and fresh fruits and vegetables are nil rated for GST, but selling live plants bundled with pots raises classification uncertainty: the bundle may be a composite supply (predominant plant retaining nil rate) or taxable at the pot rate if the pot predominates. Ceramic earthen pots may themselves be nil rated under a specific HSN, whereas plastic pots likely are not. To avoid assessment risk, sellers may charge GST on bundles, sell items separately, or seek an advance ruling.