Case Law Details
In re Karaikal Port Private Limited (GST AAR Puducherry)
Whether exemption provided in Sl. No.54(e) under Heading 9986 of GST Notification No. 12/2017-Central Tax (Rate) dt.28.06.2017 applies while rendering services such as loading, unloading, packing, storage or warehousing of imported agriculture products including wheat, to any importer or trader?
The services of loading, unloading, packing, storage or warehousing rendered by the applicant after the cargo of ‘Wheat’ imported from a foreign country, reaches the Karaikal Port, are not eligible for the Exemption provided in SI.No.54(e) under Heading 9986 of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, PUDUHERRY
Subject: GST Act,2017-Advance Ruling U/s 98 on ‘Whether exemption provided in SI.No.54(e) under Heading 9986 of GST Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 while rendering services such as loading, unloading, packing, storage or warehousing of imported agricultural products including wheat, to any importer or trader.’
We would like to make it clear that the provisions of both the Central Goods and Services Tax Act, 2017 (“CGST Act”) and the Puducherry Goods and Services Tax Act, 2017 (“PGST Act”) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the PGST Act.
2. M/s. Karaikal Port Private Limited, P.B.No. 32, Keezhavanjore Village, T.R. Pattinam, Karaikal. (hereinafter referred to as the ‘Applicant’) registered under GST having GSTN 34AACCK8122E1ZW are providing services such as loading, unloading, packing, storage or warehousing of Agricultural produce including wheat that are being imported by any importer or trader through the Karaikal Port. The applicant have filed an application on 02.01.2019 under Section 97 of the CGST Act and the PGST Act, read with rule 104 of the Central Goods and Services Tax Rules, 2017 & Puducherry Goods and Services Tax Rules, 2017 in Form GST ARA-01 seeking an Advance Ruling on “Whether exemption provided in SI.No.54(e) under Heading 9986 of GST Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 while rendering services such as loading, unloading, packing, storage or warehousing of imported agricultural products including wheat, to any importer or trader,’
3. The applicant has made payment of Rs.5,000/ for SGST bearing CIN No.18123400011633 Dated 26.12.2018 towards the fee for Advance Ruling and made payment of Rs.5000/- for CGST bearing CIN No.SBIN20073400002582 dated 07.07.2020 and have furnished copy of the same to the concerned authorities on 22.07.2020. The applicant submitted that the question raised in the application has neither been decided by nor is pending before any authority under any provisions of the CGST Act. No objection to the admission of the application has been raised by the officer concerned. Hence, the application is admitted.
4. The following submissions were made by the applicant:
4.1. They have interalia stated that the service of loading, unloading, packing, storage or warehousing of such agricultural produce, is covered under SI.No.54 (e) under heading 9986 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 and that the SI.No.54(e) under heading 9986 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 reads as follows:
” Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel raw material or other similar products or agricultural produce by way of———-
(a) …….
(b) …….
(e) loading, unloading, packing, storage or warehousing of agricultural produce;
(f)….
(h)……… :
and that the said services provided towards the agricultural produce is covered under the said exemption notification and the same would be applicable to them (applicant) also, as the notification is not restrictive only to the direct importer / trader / cultivator of the agricultural produce. ‘
4.2. The applicant have cited reference of the Advance Ruling of Andhra Pradesh vide Order No. AAR/AP/02/(GST)/2018 in the case of S.S.S.V.K Cold Storage (P) Ltd., and have stated that AAR in the said case has accepted the applicant’s claim of applicability of exemption under Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 under Entry No.54(e) for both farmers and also traders.
4.3. The applicant have cited the above Ruling and also on their interpretation of Notification No. 12/2017, have filed that the service provided by them to any traders/importers of agricultural produce with respect to the loading, unloading, packing, storage or warehousing services of such agricultural produce, are also covered under the exemption Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 under Entry No.54 (e).
4.4. The authorised signatory for the applicant Shri. K. Balaji, General Manager attended the personal hearing on 14.11.2019 and furnished copies of agreement entered into by them with the importers (service recepient), Sample invoices raised by M/s. KKPL, Bill of Entry of their recepients (for import of milling wheat in bulk)
Discussion and findings:
5. On perusal of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017, it is clear that for getting eligibility for exemption under SI.No.54 (e) covered under Heading 9986 the services of loading, unloading, packing, storage or warehousing have to fulfil the conditions mentioned therein i.e. the Services need to be relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel raw material or other similar products or agricultural produce.
5.1. It is further seen that the term “agricultural produce” has been defined in the same said Notification as below:
“(d) “agricultural produce” means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market; “
5.2. Thus, from the above it could be seen that the said services of loading, unloading, packing, storage or warehousing rendered by a taxpayer can be eligible for exemption only if they are rendered for the above purposes as clearly defined in the Notification i.e. only if the services are extended till the products are taken to primary market for disposal and as a corollary any services extended beyond the stage of primary market are not eligible for classification under the Service Accounting Code 9986 and hence cannot be considered for exemption under the said Notification.
5.3. Even though the term Agricultural Produce has been defined in the Notification / GST Act, the term “Primary Market’ has not been defined so however the term Primary Markets in common parlance generally means and include as a platform or a place, like a mandi, where the farmers are directly selling to the buyers and these are located in rural and interior areas and serve as focal points to a great majority of the farmers.
5.4. In the instant case in hand, from the copies of documents viz. the Bill of Entries, the invoice raised for supply of services and the agreements it could be seen that the applicant supplies the services of loading, unloading, packing, storage or warehousing after the cargo of ‘milling Wheat in bulk’, imported from foreign countries, reaches the port. It could be seen that the produce i.e. ‘wheat’ in this case has been procured from the farmers in the foreign countries and exported to India.
5.5. Further on perusal of the agreement entered into between the applicant – supplier of services and the recipient of services M/s. Naga Limited it could be seen vide para 4 of page 9 which reads as follows:
” NL represents to KPPL that the bagging of wheat in port is only for transportation convenience from port to their factory and that they will cut open the bags bleed the cargo in their conveyor for further processing only and not meant for market sale.”
6. Hence it is very clear from the above said documents that the applicant is providing the services of loading, unloading, packing, storage or warehousing in respect of the ‘wheat’ which is procured from the farmers from the foreign country and after getting imported into India at Karaikal Port is destined to importer’s factory for further processing and it is not destined to the primary market as required for the services to be classified under sl. No. 54(e) of Heading 9986 of the said exemption Notification. Therefore, the said services rendered by the applicant in the instant case are not eligible for the exemption under the said Notification.
7. Further it is seen that in a similar case the West Bengal Authority for Advance Ruling, 14, Beliaghata Road, Kolkata has vide order No. 17/WBAAR/2019-20 dated 19.08.2019 ruled that the service of loading, unloading, etc. rendered after the cargo of yellow peas, imported from a foreign land, reaches the port of entry, is not eligible for exemption under SI.No.54(e) of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.
RULING
In view of the above we pass the following ruling:
1. The services of loading, unloading, packing, storage or warehousing rendered by the applicant after the cargo of ‘Wheat’ imported from a foreign country, reaches the Karaikal Port, are not eligible for the Exemption provided in SI.No.54(e) under Heading 9986 of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.
2. The instant application stands disposed of accordingly.
3. The applicant or the jurisdictional officer, if aggrieved by the ruling given above, may appeal to the Puducherry State Appellate Authority for Advance Ruling under Section 100 of the Puducherry GST / CGST Act, 2017 within 30 days from the date of receipt of the Advance Ruling.
