- The Maharashtra Authority of advance Ruling has held that 5% GST is applicable on dried and polished turmeric. They held that turmeric is not an agricultural produce but is a ‘spice’.
- In the instant case, the applicant Nitin Bapusheb Patil has been a registered person under the GST Act, 2017 as a commission agent. He rendered his services to the farmers in relation to the supply of Turmeric (whole and not powdered) to the traders in APMC, Sangli.
- If the farmer and buyer mutually agree to the sale and purchase, the applicant would get a 3% commission for facilitating the sale. This commission is fixed as per the APMC regulations.
- The applicant in the instant case seeks a ruling on the issue whether the turmeric, which is not in powdered form but is in whole, would be covered under the definition of Agricultural Produce. He also seeks clarification on whether the 3% commission that he is given would be covered under GST.
- The notification dated 28-06-2021 defined agricultural produce to be any produce which is obtained by cultivating plants and rearing all life forms for food, fibre, fuel, etc. It is to be noted that horses do not come under the category of life forms. The notification further stated that no further processing should be done on such produce.
- The coram of Rajiv Maggo and T.R.Ramnani has held that dried and polished turmeric would not be covered under the definition of Agricultural Produce and hence, would not be exempted from the Goods and Services Tax. The rate of GST payable would be 5%.
- As regards the services of the applicant, it was held that the services rendered by him would also not be exempted and would be taxable under GST.
- The AAR also observed that the applicant, Nitin Patil would be required to be registered under the relevant provisions of the GST Act, 2017 for the services that he renders.
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