TaxTMI 
TaxTMI 
2019 (3) TMI 1074
X X X X Extracts X X X X
X X X X Extracts X X X X
....iety under Marine Products Export Development Authority, Ministry of Commerce & Industry, Govt. of India. It is a society registered under the Tamilnadu Societies Registration Act, 1975 and are having registered office at Door No.3/ 197, Poompuhar Road, Karaimedu Village, Sattanathapuram P.O., Nagapattinam (Dist), Sirkali Taluk -609109. RGCA has also registered itself under section 12AA of the Income-tax Act, 1961. RGCA has preferred an application for Advance Ruling on 1. Considering the nature of transactions carried out by RGCA and various exemption notification(s) under GST Laws whether RGCA is required to register under GST Laws? 2. If no registration is required for RGCA, whether compulsory registration u/s 24 is required to be made against any of the provisions of Section 24? 3. If so, whether separate registration is to be taken from all the states where the offices of RGCA is situated? Explain the procedure to obtain registration 4. If registration is required to be made, what are the tax rates applicable to the transactions of RGCA? 5. Since RGCA-Head office is having GST Registration (Migrated from TNVAT) at Tamil Nadu only other various project sites are ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... including scientific research, planning & development activities and the "Executive Committee", which shall preside over the routine and all other executive and administrative matters. Both these committees comprise of eminent Scientists, Scholars and Heads of various Government Departments (Central and State), Universities, Educational and Scientific Research Institutes etc. The following are the main activities carried out by RGCA. 1. Research and development for general public 2. Providing Consultancy Services with respect to marine products developments 3. Testing Services (All types of testing services) with respect to agriculture and marine products 4. Training - Farmers, Entrepreneurs, self-group, students, hatchery owner etc 5. Sale of Fish, crab, (all kinds of seeds) 6. Sale of Harvest - fish 7. Sale Artemia Fish Feud (production and sales) 2.2 RGCA has further stated that they are rearing aqua produce (research oriented) and are selling fish (to develop fishery in India not for profit), fish feed, fish seed and involved in training and research development of aquaculture including agriculture. RGCA has stated that they fall under the definition of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nment including watershed, forests and wildlife" and should be exempt under Notification No. 12/2017-Central Tax(Rate) dt 28.06.2017. 2.4 All services of RGCA are related to supply of aquaculture species which is related to rearing of life forms of animals and agricultural produce and is exempted under Sl.No. 54 of Notification No. 12/2017-Central Tax (Rate) dt 28.06.2017. RGCA provides training to farmers, students etc. on best management practices for aquaculture which are "agricultural extension services as per the definition in Para 20 of this notification. 2.5 Though, the aggregate turnover of RGCA is exceeding Rs. 20 lakhs, it is not liable to register itself under GST as it has no taxable supplies. If RGCA at any place of business or branch of any state or union territory make any taxable supplies, it is required to register under Section 24. However, as RGCA does not do any taxable supplies, it is not required to register. They are not required to register as they supply only goods and services which are exempt as per Section 23. RGCA avails technical services from experts and corporates outside India. AS per Section 7 (1) (b) of CGST Act, scope of supply includes "im....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng services supplied by RGCA are through developed state of the art testing laboratories at its head quarters. These are a) Central Aquaculture Pathology Laboratory (CAPL) - In CAPL the tests being conducted are pathogen screening in feeds, seeds and adults, soil and rater b) Central Aquaculture Genetics Laboratory (CAGL) - In CAGL the tests conducted are pedigree genetic analysis, sequencing of pathogens and molecular testing for species confirmation etc. The products being tested are a) Seed (babies) of diversified aquaculture species viz., fish, prawn, crab etc„ before stocking into farmer/entrepreneur's ponds b) Adults of diversified species of aquaculture viz., fish, prawn, crab etc., c) Soil, water, feed etc for the presence of pathogens d) Chemical analysis of water and soil e) Gene sequencing for confirmation, species with prevailing ambiguity Eg: Mud crabs, Tilapia etc.. They supply to small/marginal farmers and entrepreneurs for a consideration. • Training to farmers, entrepreneurs, self-help groups, students for a consideration includes a. 5 days and 10 days hands on practical trainings on Best farming methods of div....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 22. (1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: (2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day. "Aggregate turnover is defined in Sec.2 (6) to mean the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, export of goods or services, and inter-state supplies of persons having the same PAN to be computed on all-India basis. Section.23 (1), provides that (a) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act; From the above statutory provisions, it is evident that if the aggregate turnover exceeds the Rs. 20 lakh ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 63 dated 29.06.2017 as amended. Goods of Chapter 3 attracting 2.5% are goods other than fresh or chilled. Therefor live fish/ shrimp/ crab/ prawn seed supplied by RGCA are exempt from tax. Heading 0301 - Live fish are exempt from CGST under SI. No. 19 of Notification No.2/2017-C.T. (Rate) dated 28.06.2017 as amended and from SGST under Sl. No. 19 of Notification No. II(2)/CTR/532(d-5)/2017 vide G.O. (Ms) No. 63 dated 29.06.2017 as amended. Therefore, live fish supplied by RGCA are exempt from tax. 5.1 RGCA has stated that Artemia cysts that they supply are aquatic feed classifiable under 2302/2304/ 2305/ 2306/ 2308/ 2309. Artemia, also called brine shrimp, is a species of crustacean and cysts are eggs of the shrimp from which larvae hatch which is in turn used as aquatic feed. Tariff Heading 2302, 2304,2305,2306,2308 all covers products of vegetable. Hence, Artemia cysts cannot be classified under any of these tariff headings. Tariff heading 2309 covers Preparations of a Kind Used in Animal Feeding Explanatory Notes to Tariff heading 2309 states: The heading includes products of a kind used in animal feeding, obtained by processing vegetable or animal materia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....udes (5) Inedible fish eggs, roes and milt. These comprise : (i) Fertile eggs for hatching, recognisable by the presence of black spots which are the embryonic eyes. (ii) Salted roes (e.g., of cod or mackerel) used as fishing bait. These can be distinguished from caviar substitutes (heading 16.04) by their Strong disagreeable odour and because they are usually packed in bulk. Artemia cysts are eggs of brine shrimp or Artemia which is a crustacean. These eggs are used for hatching larvae and they are not for human consumption. This is covered under Chapter 05 as products of animal origin and ore specifically under tariff 0511 under product of crustaceans on similar lines as fish eggs. Heading 0511- Animal products not elsewhere specified or included are taxable at 2.5% CGST under Sl. No.21 of Notification No. 1/2017-C.T. (Rate) dated 28.06.2017 as amended and at 2.5% SGST under SI. No.21 of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended. Therefore, Artemia cysts supplied by RGCA are taxable at 2.5% CGST and 2.5% SGST as above. 6. RGCA have stated that they supply various services, for which the advance ruli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ursery technology of mud crab and Asian sea bass; Artemia biomass and cyst productions technology in saline earthen ponds; Broodstoek Multiplication techn010U for L. vannamei; Aquatic Quarantine Facility technology for marine shrimps. RGCA has also entered into MOUs with various State Government such as Department of Fisheries, Government of Tamil Nadu for technical assistance for setting up a breeding and training Centre to supply fish seed to farmers at Krishnagiri Government fish seed farm; Department of Fisheries, Government of Andhra Pradesh for providing technical assistance and consultancy services for establishment and operationalization of Asian Sea bass Hatchery The Explanatory notes explaining the scope of services under the heading 9986 states as follows: 998615 Support services to fishing This service code includes services involving operation of a fishing unit on a fee or contract basis; operation of an aquaculture unit on a fee or contract basis; other support services related to fishery, fish hatcheries and fish farms 998619 Other support services related to agriculture, hunting, forestry and fishing This service code includes other support services rela....
X X X X Extracts X X X X
X X X X Extracts X X X X
....il e. Gene sequencing for confirmation, species with prevailing ambiguity Eg: Mud crabs, Tilapia etc.. RGCA has stated that these services will qualify as Support services to fishing. However, as per the Explanatory Notes for SAC 9986, support services are the services involved directly in operation of the fish farms , hatcheries or aquaculture, whereas these testing services above are not directly involved in operation of fish farms, hatcheries aquaculture etc. The Explanatory notes explaining the scope of services under the heading 998346 states as follows: 998346 Technical testing and analysis services This service code includes 1. testing and analysis of the chemical and biological properties of materials such as air, water, waste (municipal and industrial), fuels, metal, soil, minerals, food and chemicals; 2. testing and analysis in related scientific fields such as microbiology, biochemistry, bacteriology, etc.; In the instant case, testing for pathogens of soil, water, feed etc. and chemical analysis of water and soil are covered under SAC 998346 as technical testing and analysis services under the inclusion I above. Gene sequencing of pathogens are c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....line earthen ponds etc., b. 2 or 3 days theoretical trainings for students and academia c. Seminars, workshops, awareness Programs, alternative species farming. RGCA provides training, conducts workshops on the best practices of rearing of aquaculture to farmers, hatcheries, students, academia etc. They state that these services qualify as "agricultural extension services". The definition of "agricultural extension services" as given in the notification 12/2017-C.T. (Rate) is reproduced below :- "Agricultural extension" means application of scientific research and knowledge to agricultural practices through farmer education or training; These are support services under SAC 9986, in this case related to fishing. Agricultural extension as per the definition is transmission of scientific research and knowledge to the actual producers, in this case farmers or hatcheries. Heading 9986 - Services relating to 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 or agricultural produce by way of- (f) Agricultural extension services; are exempt under Sl.no. 54....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for advance ruling is whether separate registrations are required to be taken from all the States where the offices of M/s. RGCA are located. In this regard, it is observed that Section 25(1) of the CGST Act, 2017 provides that every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable. Therefore, registration is required to be taken in the states or union territory from where taxable supplies are made. 9. Question No.4 in the application for Advance Ruling is what the rates of tax applicable to their transactions are. The rate of tax for each of the supplies made by RGCA are discussed in Para 5 and 6 above. 10. Question No.5 in the application for Advance Ruling is that when only their Head Office in Tamilnadu has GST registration, how purchase of material by their branch in Kerala from Mumbai is to be made and what documents are required to be carried under GST law for the transport of such purchased goods. In this regard, it is observed that this question is not on any of the specified issues in respect of which advance ruling may be sought in terms of Section 97 (2....