Case Law Details
In re Ms Rara Udhyog (GST AAAR Rajasthan)
A process must satisfy all the three conditions before being declared as the process exempted from GST vide the entries Nos. 24(i)(i)(c)and 54( c) ibid under the above notifications Nos. 11/2017-Central Tax (Rate) and 12/2017-Central Tax (Rate).
Coming to the first condition, we find that the impugned process is not being carried out at an Agricultural Farm. It is being carried out mechanically in the Factory away from the Agricultural Farm. Coming to the second condition, we find that the process of cleaning does not alter the essential characteristics of the agricultural produce. Coming to the third condition , we find that the process of cleaning undertaken at the end of the appellant make the produces like Saunf (Fennel),Dhaniya (Coriander), Jeera (Cumin seeds) marketable for the secondary market. After this cleaning these produces comes to the stage where these can be directly consumed by the general public. While Saunf (Fennel), Dhaniya (Coriander), Jeera (Cumin seeds) which farmer brings into the primary market is not suitable for direct consumption by the general public. There is a vast difference between the type of cleaning undertaken at the farm level by the farmer and that undertaken at the factory by specialized machines. In nutshell, the impugned process when undertaken at the factory level upgrade the marketability of the produce to the level of the secondary market. The exemption notifications do not envisage such a refinement on the produce .Thus we find that the impugned process succeeds only on one count while it failed miserably on other two counts.
Now we pay our attention to the Entry No. 24(i)(iii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and the Entry No. 55 of the Notification No. 12/2017 Central tax (Rate) dated 28/06/2017 vide which Nil Rate of GST is provided on :-
“Carrying out an intermediate production process as job work in relation 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. “
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