In re SGS India Private Limited (GST AAR Tamilnadu)
Whether the supply of “inspection and testing services” on fresh table grapes is classifiable under entry 9986 of Notification no.11/2017-Central Tax Rate) dated June 28 2017– “Support services to agriculture, forestry, fishing, animal husbandry” chargeable to NIL rate of tax and Entry 54(a) of exemption notification no.12/2017-Central Tax (rate) dated June 28,2017?
The Services provided by the applicant related to testing of chemicals in fresh table grapes are not classifiable under SAC 9986 and is not exempt as per Sl.no 54(a) of notification no.12/2017-Central Tax (rate) dated June 28,2017 as amended for CGST and Notification No. 11(2)/ CTR/532(d-15)/2017 vide G.O.(Ms) 73 dated 28.06.2017 for SGST.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, TAMILNADU
Note : Any Appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
SGS India Private Limited, 28B/1 SP and 28B/2 SP, BNT connection building, Ambattur Industrial Estate (hereinafter called the ‘Applicant’) is registered under the GST Vide GSTIN 33AAACS5514Q1Z5. They are engaged in providing various inspection, verification, testing and certification services in the agriculture and food production process in its laboratories set up in India. They have sought Advance Ruling on the following question:
Whether the supply of “inspection and testing services” on fresh table grapes is classifiable under entry 9986 of Notification no.11/2017-Central Tax Rate) dated June 28 2017– “Support services to agriculture, forestry, fishing, animal husbandry” chargeable to NIL rate of tax and Entry 54(a) of exemption notification no.12/2017-Central Tax (rate) dated June 28,2017?
The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017.
2.1 The applicant has stated that they are a company incorporated under Companies Act 1956 and have their registered corporate office at Maharashtra. They are primarily engaged in the business of providing various support services including sampling, inspection, verification, testing and certification services (hereinafter referred to as ‘inspection and testing service’) on fresh table grapes and other agricultural produce. They have stated that the activity of sampling and testing are conducted under the governance and guidelines prescribed by APEDA established under the APEDA Act and the APEDA rules. By way of this testing the applicant identifies residues of chemicals in fresh table grapes and determine as to whether the grapes are of exportable quality or not for its customers who are Indian exporters/pack houses/farmers/importers (Foreign customers) (hereinafter referred to as exporter-customers). The applicant has also stated that the exporter-customers in India approach and contract with them for conducting the sampling and testing specific types of fresh table grapes grown/cultivated in India. They in turn approach the grape farms, draw samples, conducts test in their laboratory and issues certificates/ reports of analysis to its exporter customers. The exporter customer in turn would consider the analysis in the report and take decision on their export orders. They have stated that they have set up sampling units in the state of Maharashtra at Nasik, Sangli Pune and some other regions especially where majority of grape farms are located. They have also submitted that APEDA is the primary governing body which regulates the production and exports of fresh table grapes from India. APEDA provides a recognition/approval for laboratories performing inspection and testing activity on fresh table grapes in India and function in accordance with guidelines prescribed by APEDA. These laboratories are required to operate in accordance with the guidelines of APEDA. They have stated that there is no recognition criteria prescribed for sampling units by APEDA. The applicant has setup testing unit in Chennai, which has been given the required recognition/approval for carrying out inspection and testing activity on fresh table grapes. Further, the entire supply chain i.e. grape farms, laboratories and exporters are required to be registered with APEDA.
2.2 The Applicant has stated that before initiating the inspection and testing activity, they draw a service offer quotation to its customers for their approval. The quotation proposes the following:
a) Description of goods and quantity for testing
b) Place of inspection/ testing
c) Scope of service
d) Sampling Plan
e) Method of testing
f) Proposed fees and applicable taxes
g) Miscellaneous charges
h) Payment terms
i) Reference to general conditions of service
j) Offer acceptance details
After the exporter customer provide their approval the applicant initiates the sampling procedure from the farms in accordance with the method of sampling laid down by APEDA in the procedures for export of Fresh Table Grapes in file no. QCT-2013-14-000011, Trade Notice no. Apeda/Q/56/2018-19 dated October 10, 2018 (hereinafter referred to as ‘Fresh Table Grapes export procedure’). The following is the procedure required to be followed by the applicant:
