A 5% GST shall be needed to file on turmeric in its whole form as it comes under the agricultural produce said Maharashtra Appellate Authority of Advance Ruling (AAAR).
The two-member bench of Rajeev Kumar Mital and Ashok Kumar Mehta sees that the farmers who had the first supply of turmeric in the whole form are a nontaxable individual in the Agricultural Produce and Marketing Committee, and is not liable to go through GST by the integrity of the provisions of section 23 (1) (b) and 2 (107) of the CGST Act, 2017.
The appellant as a commission agent directed his services to the farmers concerning the turmeric supply (whole turmeric, not in powder form) to traders in APMC, Sangli. He is engaging in the sell of turmeric on his own as a trader.
The appellant is enrolled as a commission agent and indeed as a trader, the services that he provides as a commission agent would be controlled by the Maharashtra Agricultural Produce and Marketing (Regulation) Rules, 1967 (APMC Rules) and bye-laws of the APMC Sangli.
On the grounds of the tender/auction, when the farmer and a buyer mutually agree to a sale and buy, the appellant, as a commission agent, rendered the activities ancillary to the turmeric supply in APMC Sangli. The appellant obtains a fixed commission at a 3% rate on the sale of the turmeric under APMC compliance and bye-laws of APMC Sangli. Towards the case in which the appellant is selling the Turmeric in the trader’s capacity, there is no issue with the GST applicability on turmeric.
The appellant seeks an advance ruling on the problem that whether the turmeric in its whole form comes beneath the definition of the Agricultural Produce and is GST privileged.
The Authority of Advance Ruling (AAR) held that dried and polished turmeric does not come beneath the “agriculture produce” and does not get privileged from GST. The HSN code of the impugned product is 0910 30 20 and the rate of GST is 5% (2.5% each of CGST and SGST).
AAR rulings are opposed by the appellant on the basis of the nonstop consumption of turmeric in spices, it is used in the medical line or for the industrial use which is in the form of powder or pest and not in the whole form of turmeric as sold via farmers. Relying on the end-use and customers’ needs the traders do polishing and the additional process post buying the turmeric via farmers.
There is no difference between the properties of the raw material and the dried turmeric as oil content and curcuminoid content are invariably being there in both the samples, but have different concentrations, AAAR specified. The difference in the concentration of both the components in raw turmeric and dried turmeric is attributable to the drying of the fresh/raw turmeric posing much more moisture. The moisture, which is ultimately vanished on drying while having the post-harvesting operation, yields a higher concentration of the components inside the dried turmeric.
The AAAR ruled that dried turmeric (whole) would be categorized beneath 0910 30 20 with a definition as “Dried Turmeric (Curcuma)”, drawing the 5% GST rate.