Gta service on cocoa beans

[Vasudev Mehta]

Whether cocoa beans can be termed as agricultural produce under gst?

[Padmanathan KV]

Notification No. 12/2017-Central Tax rate Para 2 Defines “agricultural produce” to mean 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;

From the above, it appears that cocoa bean is agri produce

[Shilpi Jain]

Further data required regarding what are the processes undertaken to get cocoa beans.

If the process is not something which is normally performed by the cultivator then it will not be regarded as an agricultural produce.

[Vasudev Mehta]

Maam, cocoa tree is grown in the dense forests of Ghana. Out of the trees, fruits develop which are known as cocoa fruits. Inside the cocoa fruits there are seeds . The seeds are removed from the fruits and dried and fermented to remove germs and imported in India and from Mumbai directly transported to jammu for manufacturing of chocolate.

[Amit Agrawal]

Issue raised depends upon industry / trade / agri practices etc.

You have clarified that '.... The seeds are removed from the fruits and dried and fermented to remove germs and imported in India ..."

Assuming that 'such processing is NOT done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market', resultant seeds (which are imported into India) does not fall under “agricultural produce” as defined under Notification No. 12/2017- Central Tax (Rate) as amended ill date, in my view.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Vasudev Mehta]

Sir,

These Cocoa beans are similar to coffee beans which are seeds which come out of coffee plant. The beans are just dried in dry sun. There is no process undertaken on beans and the processing is only done after it reaches jammu and kashmir plant. There is a circular which clarifies unprocessed coffee beans are agricultural produce. these cocoa beans are similar to coffee beans

AI Summary

Agricultural produce classification: whether post harvest processing of cocoa beans places them outside GST treatment depends on customary cultivator practices.
Qualification of cocoa beans as agricultural produce for GST hinges on whether post-harvest operations are limited to cultivator-level processes that do not alter essential characteristics (e.g., simple drying to make seeds marketable) versus more substantive treatments (e.g., fermentation) that would remove them from the definition; factual industry practice and the comparison to unprocessed coffee beans inform the classification.