TaxTMI 
TaxTMI 
2021 (12) TMI 1037
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.... in terms of SI. 54 Heading 9986 of Notification No.12/2017 CT(R) dated 28.06.2017 read with SI. No. 24 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017? Q.3 Whether the applicants required to be registered under the CGST Act, 2017 for his activities specified under Annexure-I? if yes, under which section of the GST Act he is required to be registered? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by Shri. Nitin Bapusaheb Patil, Proprietor of M/s. N. B. Patil, the applicant is as under:- 2.1 The Applicant, a registered person under GST Act, 2017, as a 'Commission Agent' in APMC, Sangli, Maharashtra, renders his services to the farmers in relation to the supply of &....
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....oice amount from the buyer, the Applicant deducts his commission and passes on the balance of sale proceeds to the Farmer. (vi) Payment to commission agent - For these services rendered by the Applicant as a registered Commission Agent, he gets a commission @3% fixed under the APMC Rules and Regulations. 2.3 Nature of Services rendered by Applicant: (i) Applicant is rendering service to farmers in relation to supply of Turmeric (i.e. agricultural produce) and can be treated as rendering service of supplying agriculture produce on behalf of the farmers to the traders, (ii) The price or consideration for the Turmeric is fixed by the Traders through the process of auctions where the commission agent has no role to play and for the supply of above mentioned service, the commission agent charges only 3% as commission from the Trader. (As per APMC, Maharashtra Act) (iii) The applicant does not maintain the inventory or stock of Turmeric since the trader will take the delivery of Turmeric on the same day from the commission agent. (iv) Applicant does not issue invoice to traders in his own name and thus does not fall within the ambit of Sche....
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....the case of M/s Vivek Trading and M/s Naresh Warehousing, Hon'ble Commissioner (Appeals) held that 'Turmeric' is an 'Agriculture Produce' and Commission Agent rendering services incidental to sale of 'turmeric' is an exempted service. 2.6.3 In the case of M/s. D.S. Bist & Sons, Nainital - 1979 (004) SCC - 0741, the Hon'ble Supreme Court observed that, in the case of certain kinds of agricultural produce which require some more processing to make it marketable, what one to judge is to find out whether in relation to that agricultural produce the process applied was minimal or was it so cumbersome or long-drawn that either, in common parlance or in the market, or even otherwise, anybody would not treat the produce as an agricultural produce........' 2.6.4 In the case of Crane Betel Nut Powder Works v. Commissioner, 2007 (210) E.L.T. 171 (S.C.), it was observed that betel nuts could be consumed by human beings only after a process of cutting them into smaller pieces and sweetening them with oil and held that the said process would not amount to manufacture as betel nuts continued to be the same even after the aforesaid process resulting in no ....
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....T Act, persons engaged exclusively in supplying goods/services/both not liable to tax or persons engaged exclusively in supplying goods/services/both which are wholly exempt from tax or Agriculturist to the extent of supply of produce out of cultivation of land are not required to obtain GST registration. 2.10.2 As per provisions of the GST Act, a commission agent, making supplies on behalf of an agriculturist, who is not a taxable person, is not liable for compulsory registration under clause (vii) of section 24 of the CGST/HGST Act, 2017. (In re M/s Bhaktawar Mal Kamra & Sons (GST AAR Haryana). 2.11 Vide Additional Submission dated 09.11.2021, applicant has reiterated the earlier submissions and has also stated that he does not issue invoice in his own name. Invoice is issued by the Sangli APMC itself as per APMC Rules & Regulations, which mentions names of Commission Agent, Buyer and Farmer. Further, Applicant does not have right to pass or reject title of goods from Farmer to Buyer and applicant does not do any sale in his own name. 2.12 The CBIC has clarified, vide Para 9 of the CBIC Circular No. 57/31/2018-GST dated 4.9.2018, that services provided by a Commission Ag....
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....ed by the applicant as a 'commission agent' in the sale of the said 'Turmeric' in the APMC, Sangli is liable to GST under the GST Laws and finally whether the applicant is required to get registered under the provisions of the GST Act, 2017. 5.3 The applicant has submitted that, first and foremost, harvesting of turmeric crop is done by farmer. Then the crop of fresh turmeric is cleaned up with normal water and thereafter boiled in a movable boiler by farmer at his farm land. The Boiled turmeric is then spread in the natural sun light for drying purpose by the farmer in the farm land. Finally, for making it marketable, the dried turmeric is polished through moveable polish machines by the farmer only. Thus, the applicant has submitted that all the said processes are carried out by the farmer who is also the cultivator of the said Turmeric. 5.4 We find that, the above mentioned processes, of drying and polishing of the Turmeric makes it sustainable and marketable. Such drying and polishing of Turmeric are specialized processes and other than simply mentioning that, the farmer is conducting the said process and that too on movable machines, the applicant has not....
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....cable to the present case. 5.9 We also rely on Circular No. 16/16/2017-GST dated 15.11.2017 wherein it is clarified that processed products such as , processed spices (in the subject case, Turmeric), etc. fall outside the definition of agricultural produce given in notification No. 11/2017-CT(Rate) and 12/2017-CT(Rate) and corresponding notifications issued under IGST and UGST Acts and that any clarification issued in the past to the contrary in the context of Service Tax or VAT/ Sales Tax is no more relevant. 5.10 Hence, we find that, the impugned services supplied by the applicant are not exempt in terms of Sl. No. 54 Heading 9986 of Notification No.12/2017 CT(R) dated 28.06.2017 read with SI. No. 24 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017. In other words the said SI. 54 Heading 9986 of Notification No.12/2017 CT(R) dated 28.06.2017/SI. No. 24 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 is not applicable in the applicant's case and therefore the applicant is required o pay GST on the commission amounts received by him. 5.11 Since the services supplied by the applicant are not exempt in the instant case, the corollary to it is that, the i....