TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 242
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....ged by the applicant. All the personnel working in the sorting lab are employees of the applicant. The applicant processes this raw semen i.e. separating X &Y chromosomes bearing sperm cells, using its proprietary technology. The output generated after processing is given back to the Semen Station for further processing and making of doses. The Semen Station does the packing of the material and is then dispatched to the various recipients. 3. As per the applicant, the semen doses are exempt from GST, while there is no clarity on "Semen Sorting Services". Further, there is no HSN/SAC for the said services. In view of the above, the applicant has sought a ruling on the following questions:- (a) Whether "Semen Sorting Services" would qualify as an exempt service under GST, similar to the exemption granted to semen doses? (b) Can we classify "Semen Sorting Services" under SAC code 9986? (c) In the absence of a specific notification or classification, under which HSN/SAC code should "Semen Sorting Services" be categorized? 4. The applicant has submitted their interpretation of the classification as under:- (a) There are two contending entries vi....
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....ased scientific process. Accordingly, it does not fall within the scope of SAC 9986. (b) SAC 9988 covers job work services, as defined under Section 2(68) of the CGST Act, 2017. "Job work" means any treatment or process undertaken by a person on goods belonging to another registered person. Section 143 permits a principal to send inputs or capital goods to a job worker without payment of tax, subject to prescribed conditions. However, this provision is procedural in nature and does not provide exemption to the services supplied by the job worker. Although raw semen belongs to the semen station and is returned after processing, the activity performed by the taxpayer is not a simple or ancillary treatment. The dominant element of the supply is the application of specialised technology, scientific expertise, and process know-how, rather than labour-oriented processing. Further, the processed semen returned by the taxpayer is an intermediate product, while the final commercially usable semen doses are manufactured and packed by the semen station. The core supply is specialised technical service, not labour-oriented processing. Accordingly, the activity does not qualify as job ....
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....y them would fall under either SAC 9986 as support services or SAC 998612 as Animal Husbandry services, more specifically SAC 9986, whereas the Department is of the view that it would fall under SAC 998399. 9. The process of bovine semen production and distribution involves two primary entities: Semen Stations and Service Providers. Semen Stations manage bull farms and produce the semen straws used in artificial insemination. Service providers, such as the applicant, utilize proprietary technology to sex-sort raw semen into X and Y chromosome-bearing cells. Operating within the Semen Stations' facilities, these providers return the processed semen to the Stations, which then handle the final packaging and distribution to recipients, who then use the same for artificial insemination of bovine cattle. 10. Sexed semen is characterized by the presence of either X-or Y-chromosome-bearing sperm, allowing the production of offspring of the desired sex. Manipulating the sex of the animals has become of great interest to the industry, due to several sex-related traits, like milking, herd replacement and growth rates. There is an increasing demand for dairy and beef products worl....
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....d welfare for optimizing productivity and animal health. Artificial insemination is the technique in which semen with living sperms is collected from the male, processed and introduced into female reproductive tract at proper time with the help of instruments. It is a tool used for livestock improvement. The applicant's service is a specialized component of this process for bovine cattle. Artificial insemination of farm animals falls under Animal Husbandry Services under SAC 998612 which in turn falls under Heading 9986. The services of Semen Sorting provided by the applicant are, therefore, support services to Animal Husbandry Services. 13. Rearing of animals refers to the process of breeding and raising livestock for various purposes, including food and labour. This plays an important role in agriculture, as it provides essential resources like milk, wool, meat and other animal products. The applicant contends that their semen sorting service qualifies as an intermediate job work process related to animal rearing. Since they process sperm-a foundational life form-to eventually produce bovine animals for milk production, their argument is that the service is a vital step in cre....
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....(5) 24 Heading 9986 (i) Support services to agriculture, forestry, fishing, animal husbandry. Explanation. - "Support services to agriculture, forestry, fishing, animal husbandry" mean- (i) 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- (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, - sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; ....