Letting out of compressors for pumping of water from borewells to agricultural field is not ‘Support Service for agriculture

 In re Vallalar Borewells (GST AAR Tamilnadu)

Q1. Whether the following supply of services provided by the applicant are in relation to agricultural operations directly in connection with raising of agricultural produce

i.Drilling of Borewells for supply of water for agricultural operations like cultivation including seeding, planting and ploughing.

ii. Letting out of compressors for pumping of water from the borewells to the agricultural fields.

Ans: ‘Provision of agricultural machinery with crew and operators’ and ‘operation of irrigation systems for agricultural purposes’ are listed as ‘Support services to crop production’. In the case at hand the applicant does not undertake the ‘operation of irrigation system for agricultural purposes’ and also `compressors’ are not agricultural machinery. They undertake the activity of drilling of borewells in the agricultural land and let out compressors. The said activity is not classifiable under SAC 9986. It is pertinent to note that even setting up of an irrigation system with pipe lines are classifiable only under SAC 9983 and the activity of ‘operation’ of such irrigation system alone is coded as ‘Support service to agriculture’. In the case at hand, the applicant undertakes only drilling of bore wells in the agricultural land and are letting out compressors. The applicant are classifying the same under SAC 995434, when the said activity is undertaken in places other than agricultural land and under SAC 995434 when the drilling is done in other than agricultural land.

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