In re Spice More Trading Company (GST AAR Kerala)
In the case of Spice More Trading Company, the Kerala Authority for Advance Ruling (AAR) examined whether the commission earned by a licensed cardamom auctioneer is exempt from GST under Notification No. 12/2017-Central Tax (Rate). The applicant, a partnership firm authorized by the Spices Board to conduct cardamom auctions, claimed that their services fall under Entry 54(g) of the notification, which exempts services provided by commission agents for the sale or purchase of agricultural produce. They argued that cardamom qualifies as agricultural produce and the post-harvest processes like drying and grading do not alter its essential characteristics. They also claimed that their role aligns with that of a commission agent under the notification.
However, the jurisdictional officer contended that the applicant functions not merely as a commission agent, but as an auctioneer, a role distinctly regulated under the Cardamom (Licensing and Marketing) Rules, 1987. The AAR noted that auctioneers operate differently from commission agents by actively managing the auction process, pooling and grading cardamom, drawing samples, conducting both physical and e-auctions, collecting sale proceeds, and disbursing payments after deducting their commission. These extensive responsibilities go beyond the traditional scope of commission agent services.
