TaxTMI 
TaxTMI 
2021 (12) TMI 722
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....ant is a Rice canvassing commission agent for rice millers and traders and are selling Agricultural Produce (Rice) as per the Agricultural Produce Marketing Committee Act (APMC Act) of the State. 3. The applicant has sought advance ruling in respect of the following questions: 1. Whether the applicant is entitled to collect GST on Supply of services which pertains to selling of agricultural produce as per APMC Act? 2. Is there any special case where the applicant has to collect GST on the Service provided (Branded and unbranded)? 4. Admissibility of the application: The question is about "determination of the liability to pay tax on any goods or services or both" and hence is admissible under Section 97(2)(e) of the CGST Act 2017. 5. Brief Facts of the case: The applicant furnishes some facts relevant to the issue: 5.1 The applicant states that he is rice canvassing commission agent for Rice millers and traders. They are selling agricultural produce (rice) as per the Agricultural Produce Marketing Committee Act (APMC Act) of the State. 5.2 The applicant contends that they are not raising any sale invoices other than commission bill for their service....
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....teristics" and submit that the wordings are not "does not alter its essential identity" so as to postulate a contention that the process of de husking alters the identity of paddy into that of rice, a different commodity. 5.6 The applicant also relies on the ratio of judgment of the Hon'ble Supreme Court of India by larger bench of Hon'ble three Judges in the case of Deputy Commissioner of Sales Tax (Law) Board Revenue (Taxes), Ernakulam vs Pio Food Packers (1980) 46 STC 63 in which the decision of the Hon'ble Supreme Court is that pineapple fruit even after it is processed into slices, added with sugar as a preservative and canned, the essential characteristic of pineapple as a fruit is not altered: "In the present case, there is no essential difference between pineapple fruit and the canned pineapple slices. The dealer and the consumer regard both as pineapple. The only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling. The additional sweetness in the canned pineapple arises from the sugar added as a preservative. On a total impression, it see....
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....cant they are acting as "Commission Agent" i. e, services provided for commission towards sale or purchase of agricultural produce. The said activity falls under Service Code (SAC)/ Heading 998619 of Section 8 and chapter 99 of GST Tariff and the same reads as "Supporting services to agriculture, hunting, forestry and fishing - other support services to agriculture, hunting, forestry and fishing". 4. The effective rates for the services are notified under Notification No. 11/ 2017-C.T.(Rate) and 12/ 2017-C.T. (Rate), both dated 28.06.2017 and the said notifications list the activity of "Commission Agent" under clause (g) of Sl.No.24 and Sl.No.54 of the said notifications and description of the mentioned as "Services by any Agricultural Produce Marketing committee or Board or Services Provided by a commission agent for sale or purchase of agricultural produce". 5. The terms "agricultural produce" has been defined under notifications No.11/ 2017-C.T. (Rate) and 12/2017-C.T. (Rate), both dated 28.06.2017 and the relevant portion is reproduced as under; Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.....
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.... as agricultural produce, the criteria (i) stated above has been fulfilled as rice is a product obtained from paddy cultivation. When we examine with reference to the second criteria in the case of rice, it is seen that in addition to further processing by the cultivator, 'milling' is done by the millers, which is normally neither done by the producer nor the cultivator. The essential character of paddy has also been changed to 'Rice, which is readily consumable, but paddy is raw and requires certain milling process including husking, steaming, de-browning, polishing, sorting etc., these processes are paddy harvesting, cutting, handling thrashing and cleaning. Thus all the above three criteria to be satisfied to be called "Agricultural produce" were not fulfilled and therefore goods/ Rice being dealt by the applicant cannot be termed as "Agricultural Produce". 7. Thus the activity of the applicant in the instant case viz., the activity of canvassing for Rice as 'Commission Agent' is not covered under clause(g) of Sl.No,24 of the notification No.11/2017-Central Tax dated 28.06.2017 and the services of 'Commission Agent' for rice millers and trade....
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....agent" means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another; 10.2 In the instant case, the applicant is engaged in providing the services of 'Commission Agent' for rice millers and traders, where in applicant is of the opinion that the said transaction falls under entry at Si No. 54 of the Notification No12/2017-C.T. (Rate), dated 28.06.2017, and exempted from levy of GST. Clauses (a) to (f) of S1 No. 54 cover the services relating to agricultural operations, supply of farm labour, processing of agricultural produce, leasing of agro machinery and land, services relating to agricultural produce and agricultural extension services. Commission agent services do not fall in any of the said clauses, and the same is also not claimed by the applicant. 10.3 The applicant claims that the services are covered under clause (g) of Sl.No. 54 of the said Notification, which reads as: "(g) services by any Agricultural Produce Marketing Committee or Board or services provided ....
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....ntial characteristics of the produce from paddy to rice, which are both distinctly identifiable and separately marketable commodities. Thus, the criteria (ii), and (iv) above are not satisfied in the instant case, in as much as the processing is not done by the cultivator or the producer and the essential character of the produce has also undergone change. Therefore, rice cannot be treated as agricultural produce in terms of para 2(d) of the said Notification, and the commission agent services for sale or purchase of rice does not fall in the ambit of SI.No. 54 of the Notification 11/2017-CT(Rate) dtd 28.06.2017 and therefore not eligible for any exemption from levy of GST. The supporting judgments mentioned by applicant are not squarely applicable in this scenario as paddy and rice are distinctly identifiable commodities as discussed above. 10.6 Further to be covered under the entry, the services by a commission agent should be directly linked to the services relating to the cultivation and this is made amply clear by the use of the words "by way of which links the cultivation process and the marketing process. The applicant is not assisting the cultivators of paddy, instead is....