GST Rate on Ground Nuts - Exempt or 5%

[Krishna Murthy]

As per S No 81 of 2/2017 CTR Notification Ground Nuts are exempted from tax when the same is of seed quality. While the Ground Nuts are other than seed quality it is taxable at 5% as per S No 65 of Schedule 1 of Notification No 1/2017. My question is how can the seller or assessing officer determine whether the Ground Nuts are used by the buyer for seed purpose or other than the seed purpose. It is to be noted here that the same quality seed can be used for seed purpose or for oil extraction (other than seed).

Does these provisions mean seed quality should be seen from seller point of view irrespective of usage by the buyer or the seller is supposed to take any declaration from the buyer regarding its usage.

[YAGAY andSUN]

In our view End Use related compliance must be associated with such transaction.

[Ganeshan Kalyani]

Sir, I agree with M/s.Yagay and Sun's reply. The end use determines whether it is seed quality or not. If it is used for sowing then it is seed quality. If it is used for other purpose like extracting oil form it then generally it is not of seed quality.

[Krishna Murthy]

Thank you sir for your reply. But, how can the seller ensure the end usage by the buyer when the buyer can use for any purpose he likes. Does the seller need to take any declaration regarding usage from the buyer since onus is on the seller to prove when exemption is claimed.

[DR.MARIAPPAN GOVINDARAJAN]

You may ask the buyer as to the use of seed and then determine exemption or rate of tax.

[KASTURI SETHI]

Rightly advised by Dr.Govindarajan, Sir. I am of the view that you may ask your buyer to follow the procedure laid down in the following Board's circular:- (Seller can keep the copy of seed certificate ( issued by the jurisdictional Assistant Director Seed Certification ) with him as documentary proof. The burden of proof is cast upon the person who avails exemption to the effect that exemption has been availed correctly as per GST laws.

Seed Certification Tags - GST applicability

Circular No. 100/19/2019-GST, dated 30-4-2019

 

AI Summary

Debate on GST Rate for Ground Nuts: Exempt or 5% Tax? Seller Must Prove Buyer's Intended Use for Exemption. A discussion on the GST rate applicable to ground nuts focuses on whether they are exempt or taxed at 5%, depending on their quality as seed or otherwise. The main issue is determining the end use of ground nuts, as they can be used for sowing or oil extraction. Participants suggest that the seller should ascertain the buyer's intended use, possibly requiring a declaration or documentation like a seed certificate, to justify claiming a tax exemption. The burden of proof for exemption lies with the seller, who must comply with GST laws and relevant circulars.