TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 778
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....d that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided by nor are pending before any authority under any provisions of the GST Act. The application is therefore, admitted. 4. Brief facts of the case: M/s. Ganga Kaveri Seeds Pvt. Ltd is engaged in production and sale of agricultural seeds. In the process of production, the applicant outsources certain services such as cleaning, drying, grading and packing to the job workers and stores the seeds in various facilities after processing them. In the process they also transport the seeds by engaging a GTA. The applicant is desirous for ascertaining whether the services obtained by them in production of the seeds from other agencies including GTA are taxable or exempt. Hence this application. 5. Questions raised: 1. Whether the seeds produced/ procured and processed, packed and sold by the Applicant as seeds for sowing are agricultural produce in terms of....
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....issued on 29.05.2020 and subsequently a show cause notice was issued to which they have already submitted a reply. 3. That as their application is earlier to the audit report they are eligible for clarification from AAR. 4. That notwithstanding the above the audit report of the SCN covers only (1) question i.e., question no. (4) Submitted to AAR. 7. Discussion & Findings: The applicant M/s. Ganga Kaveri Seeds Pvt. Ltd averred that they produce seeds namely maize, paddy, sunflower, bajra, wheat, cotton, jute, sorghum, mustard etc., That the production and sale of the seeds involves cleaning, grading, treatment with pesticide/insecticide, packing and storing the same. In this connection, it is observed that the Seed Act, 1966 defines seed at Section 2(11) as: "Seed" means any of the following classes of seeds used for sowing or planting- (i) Seeds of food crops including edible oil seeds and seeds of fruits and vegetables; (ii) Cotton seeds; (iii) Seeds of cattle fodder; And includes seedlings, and tubers, bulbs, rhizomes, roots, cuttings, all types of grafts and other vegetatively propagated material, of food crops or cattle fodder;" Thus all grain do not qualify t....
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.... food, fibre, fuel or raw material for further processing. In the definition of agricultural produce, the word 'raw material' is used which is a general word and is in the company of specific words i.e., food, fibre and fuel. These specific words indicate direct consumption by human or in industry but not in cultivation. The Hon'ble Supreme Court of India in the case of Godfrey Philips India Vs State of U.P 2005 (139) STC 537, held that when 2 or more words susceptible of analogous meaning are clubbed together, they are understood to be used in their cognate sense. They take, as it were, their colour from and are qualified by each other, the meaning of the general word being restricted to a sense analogous to that of the less general. In this case, it was held that even in case of inclusive definition, principle of noscitur a sociis can be applicable. Applying this rule to the present facts, supply of seed does not fall under the definition of agricultural produce as the seed does not fulfill the utilities prescribed therein. Similarly the said definition restricts the 'agricultural produce' to unprocessed goods. Further even if 'processing' is done it should be 'such processing....
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....ransportation of seeds from farm to storage facility and then transportation of packed seed from storage facility to distributors is not exempt under: a. Serial No. 21(a) of Notification No.12/2017, as this entry provides exemption on transportation services to agricultural produce and from the foregoing discussion it is established that seed is not agricultural produce in terms of the definition used in the notification, the transportation services engaged by a seed company are not exempt. 4. If processing is undertaken by an applicant himself for in house seed production, there is no supply and hence exempt. 8. The ruling is given as below: In view of the above discussion, the questions raised by the applicant are clarified as below: Questions Ruling 1) Whether the seeds produced/ procured and processed, packed and sold by the Applicant as seeds for sowing are agricultural produce in terms of the definition under the Notification No. 12/2017- Central Tax (Rate) dated 28-06-2017 and 11/2017- Central Tax (Rate) dated 28-06-2017. Seed is not an agricultural produce in terms of the definition in the said notifications. 2) Whether the storage of the seeds in the leased stor....