Fresh Psyllium Seeds Taxable at 5% GST, Not Exempt: Rajasthan AAR

In re Rukhm Industries Limited (GST AAAR Rajasthan)

Summary: The Rajasthan Authority for Advance Ruling considered the GST classification and rate applicable to fresh Psyllium seeds (Isobgul) proposed to be procured by RUKHM Industries Limited through Agricultural Produce Market Committee (APMC)/Krishi Upaj Mandi Samiti (KUMS) auctions directly from farmers/cultivators or through subsequent traders, without undergoing drying, freezing, crushing or other processing qualifiers.

The applicant proposed to purchase Psyllium seeds in their natural form, store them in godowns without processing and subsequently sell them to traders/customers. It contended that the seeds remained fresh agricultural produce and sought exemption under Entry No. 87 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, covering plants and parts of plants, including seeds and fruits, of a kind used primarily in perfumery, pharmacy or for insecticidal, fungicidal or similar purposes, fresh or chilled. In the alternative, it relied on Entry No. 77 relating to “all goods of seed quality”.

The Authority examined the nature of Psyllium, its classification under Chapter 12 and Tariff Item 12119013, the harvesting and threshing process, storage and marketing practices, and the distinction between fresh/chilled and dried goods. It observed that threshing is a distinct post-harvest mechanical operation and that the available material did not establish that the goods would satisfy the conditions applicable to “fresh or chilled” Psyllium seeds. The Authority also noted that the exemption under Entry No. 77 depends upon the goods being of “seed quality”, including viability, germination and suitability for sowing, and held that the applicant had not provided sufficient evidence to establish those conditions. It therefore ruled that the proposed Psyllium seeds could not qualify as “fresh” Isabgol seeds or as “goods of seed quality” for the claimed exemptions. The product was held classifiable under sub-heading 1211 9013 and squarely covered by Entry No. 71 of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025, attracting GST at 5%, comprising 2.5% CGST and 2.5% SGST.