Cleaning agricultural produce in factory does not qualify as job work on agricultural produce, hence liable to GST: AAAR, Rajasthan

0
246
Cleaning agricultural produce in factory does not qualify as job work on agricultural produce, hence liable to GST: AAAR, Rajasthan

Cleaning agricultural produce in factory does not qualify as job work on agricultural produce, hence liable to GST: AAAR, Rajasthan

(Rara Udhyog)
The appellant is engaged in cleaning of agricultural produce and for this purpose it is having cleaning plant which removes impurities but does not change the essential characters of the agricultural produce. The appellant has applied for advance ruling to determine the exemption from GST on activity of cleaning of agricultural produce as per exemption notification under GST.
The Authority for Advance Ruling, Rajasthan ruled that the cleaning of the above produce is not covered under the exemption notification and shall not attract NIL GST rate. The appellant filed an appeal before Appellate Authority for Advance Ruling, Rajasthan.
The Appellate Authority for Advance Ruling, Rajasthan observed that _to avail of the benefit under exemption notification three conditions w.r.t to cleaning process should be satisfied: a) It should be carried out in agricultural farm, b) It should not alter the essential characteristics of the agricultural produce, c) It should make the produce marketable for the primary market._ However, the cleaning process undertaken at the factory level by the appellant. Even though such process does not change the essential characteristics of the produce, the marketability of the produce is upgraded to the level of secondary market instead of primary market. Job work in relation of cultivation of plants includes harvesting, threshing, supply of farm labour, etc., carried out at agricultural farm. Hence, mechanized cleaning does not fall under the intermediate production process as job work in relation to cultivation of plants.
Therefore, the cleaning of agricultural produce carried out by the appellant is taxable under GST.

LEAVE A REPLY

Please enter your comment!
Please enter your name here