In re Global Marketing (GST AAR Karnataka)
Introduction: Discover the recent ruling from the GST Authority for Advance Ruling (AAR) Karnataka, highlighting the exemption granted to Tree Pruners under the case of Global Marketing. This article provides a comprehensive analysis of the classification and the specific exemption criteria applied to Tree Pruners as agricultural implements.
1. Background of Global Marketing: Global Marketing, a Partnership firm, sought an advance ruling on the classification and GST exemption for their product, “Tree Pruners,” used in agricultural activities like harvesting crops and spraying pesticides.
2. Key Questions Raised: The applicant presented two key questions: the classification of Tree Pruners under HSN Code 82016000 and whether the supply of these agricultural hand tools to farmers is exempt from CGST/SGST/IGST.
3. Admissibility of the Application: The questions relate to the “Classification of goods or services” and “Determination of the liability to pay tax on goods or services.” These fall under Sections 97(2)(a) and (e) of the CGST Act 2017, making the application admissible.
4. Facts of the Case: Global Marketing imports Tree Pruners, consisting of an extendable pole with a knife, predominantly made of aluminum. The product is used for harvesting crops like areca, pepper, and coconut, emphasizing its agricultural relevance.
5. Legal Interpretation: The applicant argued that Tree Pruners should be classified as agricultural implements manually operated, falling under Tariff Heading 8201. The AAR considered both the usage and raw material, aligning with the common parlance definition of agricultural implements.
6. Exemption under Notification No.2/2017: Notification No.2/2017 – Central Tax (Rate) dated 28.06.2017 exempts goods under Tariff Heading 8201, explicitly mentioning “pruners of any kind.” The AAR concluded that Tree Pruners, being manually operated agricultural implements, qualify for exemption under Entry No.137 of the notification.
Personal Hearing / Proceedings: Sri. Veerabasanagowda, Chartered Accountant and authorized representative of Global Marketing, appeared for the personal hearing proceedings held on 07.09.2023, reiterating the facts presented in the application.
Findings & Discussion:
