Case Law Details
In re Sagar Aqua Culture Private Limited (GST AAR Gujarat)
M/s. Sagar Aqua Culture Private Limited, registered under GST in Gujarat, sought an advance ruling on the classification of “Paddle Wheel Aerators” (including parts) manufactured and sold by it for exclusive use in aquaculture operations such as fish and shrimp farming. The aerators are used to increase dissolved oxygen levels in aquaculture ponds by circulating water, thereby supporting aquatic life. The components include a motor, floats (HDPE), gearbox, paddles, and shafts.
The applicant sought clarification whether the product is classifiable under HSN 8436, covering “Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery,” attracting 12% GST (and subsequently 5% under Notification No. 9/2025-CT(R) dated 17.09.2025), or under the residual HSN 8479, covering machines with individual functions not specified elsewhere, attracting 18% GST.
The applicant contended that aquaculture is akin to agriculture and relied on the National Policy for Farmers, 2007, which includes fishers within the definition of “farmer.” It also relied on a CESTAT Chennai decision holding Paddle Wheel Aerators to be classifiable under HSN 8436, and on the definition of “agricultural produce” in Notification No. 12/2017-CT(R), which includes rearing of all life forms of animals. Further reliance was placed on a Press Release dated 04.09.2025 issued by the Ministry of Fisheries stating that aerators essential for aquaculture operations would attract 5% GST.
The Authority examined the issue of classification. It observed that the key question was whether Paddle Wheel Aerators used exclusively in aquaculture fall within HSN 8436 or under the residual HSN 8479.
The Authority held that reliance on the National Policy for Farmers was misplaced. The policy defines “farmer” in a broad and holistic sense and is not restricted to traditional agriculture. Referring to the Supreme Court decision in Commissioner of Income-tax v. Benoy Kumar Sahas Roy, it observed that definitions in one statute or policy cannot automatically be adopted for interpreting another statute. Therefore, inclusion of fishers in the policy does not mandate classification of aquaculture machinery as agricultural machinery.
The Authority also examined the Supreme Court judgment in Maheshwari Fish Seed Farm v. Tamil Nadu Electricity Board, where the Court held that pisciculture is not agriculture. The Supreme Court ruled that “agriculture” must be understood in its natural and popular sense and distinguished from “aquaculture,” holding that pisciculture is not agriculture.
The Authority further noted that HSN 8436 specifically refers to machinery used in agriculture, horticulture, forestry, poultry-keeping, or bee-keeping. The explicit mention of these activities indicated legislative intent to confine the entry to those categories. The term “agriculture” must be understood in its popular sense and not as an all-encompassing term. Therefore, fish and shrimp farming machinery cannot be brought within HSN 8436 merely by analogy.
Regarding reliance on the definition of “agricultural produce” in Notification No. 12/2017-CT(R), the Authority observed that the notification itself restricts its definitions to its own purposes. Hence, that definition cannot be used to interpret entries in Notification No. 1/2017-CT(R) or the GST Tariff.
As for the Press Release issued by the Ministry of Fisheries, the Authority held that it was not determinative for classification. It was issued by a ministry other than the Ministry of Finance, which has jurisdiction over taxation. Further, classification of goods is a matter for judicial and quasi-judicial authorities and cannot be governed by executive press releases. Reference was made to the Bombay High Court decision in Schulke India Pvt. Ltd., which held that executive instructions cannot direct classification decisions.
Having concluded that Paddle Wheel Aerators do not fall under HSN 8436, the Authority observed that there is no specific entry covering them in the GST Tariff. Therefore, they are appropriately classifiable under the residual entry HSN 8479.
Accordingly, the Authority ruled that Paddle Wheel Aerators (including parts) used exclusively in aquaculture are classifiable under HSN 8479 and attract GST at 18% under Sl. No. 366 of Schedule III to Notification No. 1/2017-CT(R) from 01.07.2017 to 21.09.2025 and under Sl. No. 464 of Schedule II of Notification No. 9/2025-CT(R) from 22.09.2025 onward.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT
M/s. Sagar Aqua Culture Private Limited , Plot No 1, Survey No 1084, Ardoi – Kotda Sangani Road, Rajkot, Gujarat- 360030 [for short — appliance] is registered under GST and their GSTIN is 24AATCS9859H1ZG.
2. The Applicant is engaged in the business of aquaculture equipment, specifically focusing on the manufacture and sale of Paddle Wheel Aerators. These aerators are critical for maintaining appropriate oxygen levels in aquaculture ponds, an essential aspect of rearing fish, prawns, and shrimp. As per the applicant, the product in question performs a distinct function by increasing dissolved oxygen in water through the movement and circulation of water, thereby improving the health and productivity of aquatic organisms. The usage of the aerators is exclusively for aquaculture/fish farming/ shrimp ponds. The components of the Aerator are Floris motor, Floats (usually HDPE), Gearbox, Paddles and Stainless steel or galvanized metal shafts.
3. The applicant has sought an advance ruling on the following question: -Whether the product namely “Paddle Wheel Aerators” (including its parts) which are manufactured and/or sold by the applicant and used exclusively in aquaculture operations (such as shrimp and fish farming) are classifiable under:
HSN 8436: “Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders” as specified in No. 199 of Schedule II – 6% to Notification No. 1/2017-Central Tax (Rate), as amended from time to time attracting GST at the rate of 12%.
OR
HSN 8479: “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.” as specified in SI. No. 366 of Schedule III – 9% to Notification No.1/2017-Central Tax, as amended from time to time (Rate) attracting GST at the rate of 18%.
4. The applicant’s interpretation of law in respect of the questions on which advance ruling is sought is as under:-
(a) No. 199 of Schedule If to Notification No.1/2017-Central Tax (Rate) covers -other agricultural, horticultural, forestry, poultry-keeping or beekeeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof of Chaper Heading 8436. The Paddle Wheel Aerators used exclusively in aquaculture (fish/shrimp farming) are akin to agricultural machinery used in farming activities, especially in the context of modern aquaculture being recognized as an extension of agricultural activity.
(b) The definition of “farmer” as depicted in National Policy for Farmers, 2007 includes fishers also apart from agricultural holders, cultivators, agricultural labourers, sharecroppers, tenants, poultry and livestock rearers, beekeepers, gardeners, pastoralists, non-corporate planters and planting labourers, as well as persons engaged in various farming elated occupations such as sericulture, vermiculture, and agro-forestry.
(c) Reliance is place on the judgement of the Hon’ble CESTAT, Chennai, wherein the Paddle Wheel Aerators used for fisheries/aquaculture are held to be classifiable under chapter heading 8436 of the CTH.
(d) The statutory definition of “agricultural produce” as provided under Explanation 2(d) to Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time, supports the classification of Paddle Wheel Aerators under HSN 8436. The definition of “agricultural produce” explicitly includes “rearing of all life forms of animals”, with no limitation to terrestrial animals. The use of the words “all life forms of animals” reflects the legislature’s intention to cover the full spectrum of farming activities, including those involving aquatic species, under the umbrella of agriculture.
(e) Heading 8436 covers: “Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery …”. The term “other” in the description must be interpreted ejusdem genres with the preceding specific terms-i.e., machinery used in biological, rearing, or cultivation-based farming activities.
(f) Nocturn a socials-This principle implies that words draw meaning from accompanying words. Therefore, aquaculture equipment should be interpreted in the same category as poultry and bee-keeping machinery.
(g) Heading 8479 is a residual entry covering: “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter.” As established by jurisprudence and classification rules, the residual heading applies only where no other heading captures the product’s function or use. Therefore, invoking I leading 84 79 would be incorrect in law, as it is settled that a specific heading prevails over a general/residual one.
(f) Therefore, Paddle Wheel Aerators merit classification under HSN 8436, specifically attracting 12% GST under Si. No. 199 of Schedule II to Notification No.1/2017-Central Tax (Rate), as amended.
5. The applicant has further submitted that the subsequent to the filing of advance ruling application, the Central Government has issued Notification No. 9/2025-CT(R) dtd. 17.09.2025 , whereby the rate of tax applicable to goods classifiable under HSN 8436 has been reduced to 5% w.e.f. 22.09.2025.
6. Personal hearing was granted on 06.02.2026 wherein Shri Meet Parikh and Shri Samir Agicha, Chartered Accountants for the applicant and reiterated the facts & grounds as stated in the application. They further submitted that in the Press Release dated 04.09.2025 issued by the Ministry of Fisheries, Animal Husbandry & Dairying it has been mentioned that ” Diesel engines, aerators, and sprinklers, essential for aquaculture operations and hatcheries will now attract only 5 GS7′ instead of the earlier 12 to 18 percent….” . Therefore, the Paddle Wheel Aerators would merit classification under USN 8436, whose rate of tax has been reduced to 5% w.e.f 22.09.2025 vide Notification No. 9/2025-CT(R) dtd. 17.09.2025.
Discussion and findings
7. At the outset, we would like to state that the provisions of both the CGST Act and the GGST 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 GGST Act.
8. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made both oral and written during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant’s submission/interpretation of law in respect of question on which the advance ruling is sought.
9. We find that the short issue to be decided is the classification of ‘Paddle Wheel Aerators’, which are exclusively used in aquaculture/fish farming/ shrimp ponds for maintaining appropriate oxygen levels in aquaculture ponds, an essential aspect of rearing fish, prawns, and shrimp. The applicant’s view is that the Aerators would fall under HSN 8436 under “Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders” and not under HSN 8479: “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.”
10. The main argument advanced by the applicant for bringing the Aerators under HSN 8436 is that Paddle Wheel Aerators used exclusively in aquaculture (fish/shrimp farming) are akin to agricultural machinery used in farming activities.
To arrive at such an interpretation, they have placed reliance on the definition of “farmer” as depicted in National Policy for Farmers, 2007, which includes fishers also. They have also relied upon the judgement of CESTAT Chennai in the case of Suyog Agro Poultry Products Pvt. Ltd. Vs C.C. (Sea-Imp.), Chennai reported at 2016 (335) E.L.T. 350 (Tri. – Chennai) which has held that Paddle Wheel Aerators fall under Heading 8436 of the Customs Tariff Act, 1975. Reliance is also placed by them on the definition of `Agricultural produce’ mentioned in Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 , which includes “rearing of all life forms of animals”.
11. The reliance on the National Policy for Farmers (2007) definition is misplaced, as it overlooks the policy’s intended breadth. The Preface explicitly states that the framework is “defined holistically and not merely on agriculture,” distinguishing it from a standard Agriculture Policy. By design, the definition encompasses a wide spectrum of activities across multiple sectors, rather than being restricted solely to traditional agriculturalists. We find that the Supreme Court in the case of Commissioner of Income-tax West Bengal, Calcutta v. Benoy Kumar Sahas Roy, AIR (1957) Supreme Court 768 has held as under:-
Whether the narrower or the wider sense of the term “agriculture” should be adopted in a particular case depends not only upon the provisions of the various statutes in which the same occurs but also upon the facts and circumstances of each case. The definition of the term in one statute does not afford a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally.
Thus, the inclusion of “fishers” within the definition of “farmers” under the National Policy for Farmers (2007) does not mandate the extension of that definition to the classification of agricultural machinery. The definition of the term ‘farmer’ in the National Policy for Farmers, 2007 was crafted specifically to achieve the objectives of that particular policy; as such, it cannot be transposed to define common parlance terms within an entirely different regulatory or technical context.
12. As regards the reliance of the applicant on the order of the Tribunal in the case of Suyog Agro Poultry Products Pvt. Ltd., we find that Tribunal in the case of–Suyog–A Agro Poultry Products Pvt. Ltd. has also relied upon the definition of farmer in the National Policy for Farmers, 2007 to hold that paddle wheel aerators used in aqua farming are agricultural machineries and classifiable under HSN 8436. Therefore, we respectfully do not follow the decision of the Tribunal.
13. We find that the Supreme Court in the case of Maheshwari Fish Seed Farm Vs Tamil Nadu Electricity Board and Anr reported at 2004 (4) SCC 705 has dealt with the issue as to whether pisciculture is agriculture. The Supreme court was dealing with the claim made by appellants engaged in fish farming i.e pisciculture, seeking exemption of electricity charges, which was granted to those involved in agriculture activities, by way of a notification. The claim made by the appellants was that pisciculture is only a specie of agriculture. The Supreme Court found that the Act, either in the main part, or in the Schedule detailing the tariff rates, does not define agriculture. The Supreme Court held that it is a settled rule of interpretation that the words not defined in a statute are to be understood in their natural, ordinary or popular sense. The Supreme Court, further, held as under: –
The relevant entry in the Act as its historical background show was intended to provide electricity at concessional rates or five of any charge to the farmers by dividing them into classes such as small farmers and others farmers. A farmer would be an agriculturist in the traditional sense and narrow meaning of the term. A person engaged in aquaculture or fish farming would not be called a farmer. Neither the legislature while enacting the schedule to the Act as it originally stood nor the State Government issuing the notification amending the schedule can be attributed with the intention that they had intended to make available electricity at concessional rate or without charge to aqua culturists whose activity is purely commercial. We are also not prepared to hold that in the circle of agriculturists fish farming is understood as agriculture.
In our opinion, for the purpose of interpreting the Act and the notification issued thereunder, the term ‘agriculture’ has to be read in contradistinction with the term ‘aquaculture’. Pisciculture is a branch of aquaculture. Pisciculture is not agriculture.
14. We find that the purpose of the entry at HSN 8436- Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery is specific to these machineries i.e. those used in agriculture, horticulture, forestry, poultry or bee keeping. Further, the very fact that the entry covers horticulture, forestry, poultry and bee-keeping only means that the intention of the legislature was to include the machineries used in these activities only. The contention of the applicant that it is an inclusive definition and would cover fish/shrimp farming equipment as well is, therefore, not correct. Further, it is well settled that where the definition of a word has not been given, it must be construed in its popular sense, if it is a word of everyday use. Popular sense means “that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it”. Also, the very fact that the terms horticulture, forestry, poultry-keeping and beekeeping has been separately mentioned along with agriculture shows that the intention was to keep the term agriculture in its popular sense and not an all-encompassing one.
15. The applicant has also taken recourse to the definition of the term `Agricultural produce’ mentioned in 2(d) to Notification No. 12/2017-CT(R) dtd. 28.06.2017. We find that Para 2 of the notification makes it very clear that the definitions mentioned in the notification are for the purposes of that notification only. Therefore, the definition mentioned in the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.20177 cannot be used for interpreting the term agricultural machinery in Notification No. 1/2017-CT(R) dtd. 28.06.2017 as well the terms mentioned in the HSN 8436.
16. The applicant has also relied upon the Press release issued by the Ministry of Fisheries, Animal Husbandry & Dairying wherein it has been mentioned that ” Diesel engines, aerators, and sprinklers, essential for aquaculture operations and hatcheries will now attract only 5 % GST instead of the earlier 12 to 18 percent….” to buttress their argument of classification under HSN 8436. There are two primary reasons why this press release is not determinative. First, it was issued by the Ministry of Fisheries, Animal Husbandry & Dairying, rather than the Ministry of Finance, which holds the sole jurisdiction over taxation matters. Secondly, a press release cannot be used as a tool for the classification of a product, which is to be best left to the wisdom of judicial/quasi-judicial authorities. A similar issue came up before the Bombay High Court in the case of Schulke India Pvt. Ltd Vs Union of India [2024 (91) G.S.T.L. 225 (Born.)], wherein the Revenue relied upon a Press release dated 15.07.2020 to classify alcohol-based hand sanitizers as disinfectants like soaps, antibacterial liquids, Dettol etc., which attracted GST at the rate of 18% whereas the petitioner wanted to classify it as ‘medicament’ It was also contended. l that the Press release is an executive instruction under Article 73 of the Constitution read with Article 77 of the Constitution. The High Court held as under:-
“23. As noted earlier, the impugned Press Release, does not indicate that the same is relatable to either Article 73 or Article 77 of the Constitution. Though that, by itself, may not be a ground to strike down the impugned Press Release, still, in the absence of any such indication or compliance with the provisions of Article 77 of the Constitution, we cannot simply accept that the impugned Press Release is indeed an instance of the exercise of executive power by the Union. In the absence of any compliance with the requirements of Article 77 , the burden was on the Respondents to establish this aspect. The Respondents have failed to discharge this burden.
24. However, even though it is assumed that the impugned Press Release is an instance of the exercise of executive power by the Union still, the question is whether, in the purported exercise of such executive power, the Union is competent to direct judicial and quasi-judicial authorities to decide the issue of classification of products in a particular manner. We cannot lightly accept that the Union, in the exercise of executive power, has such authority because the issue of classification, which is essentially an issue of interpretation, must be undertaken by the various judicial and quasi-judicial adjudicatory authorities under the Statute. Though there may not be a very distinct line separating legislative and executive functions, still the line separating the judicial functions from the executive and legislative functions is fairly clear. The executive cannot transgress on the functions within the exclusive province of the judicial or even quasi-judicial authorities.
[Emphasis added]
17. Having held supra that Paddle Wheel Aerators used in fish/shrimp do not fall under I-ISN 8436, we find that there is no specific entry in the GST Tariff, which covers Paddle Wheel Aerators. Therefore, we are of the opinion that the Paddle Wheel Aerators would rightly fall under the residual entry HSN 8479: “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.
18. Consequently, Paddle Wheel Aerators would attract GST @ 18% in terms of No. 366 of Schedule III to Notification No.1/2017-Central Tax, as amended, w. e. f. 01.07.2017 to 21.09.2025 and in terms of Sl. No. 464 of Schedule -II of Notification No. 9/2025-CT(R) dtd. 17.09.2025 w. e. f. 22.09.2025
19. In view of the foregoing, we rule as under: –
RULING
Ques: Whether the product namely “Paddle Wheel Aerators” (including its parts) which are manufactured and/or sold by the applicant and used exclusively in aquaculture operations (such as shrimp and fish farming) are classifiable under:
HSN 8436: “Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders” as specified in SI. No. 199 of Schedule II – 6% to Notification No. 1/2017-Central Tax (Rate), as amended from time to time attracting GST at the rate of 12%.
OR
HSN 8479: “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.” as specified in SI. No. 366 of Schedule III – 9% to Notification No. 1/2017-Central Tax, as amended from time to time (Rate) attracting GST at the rate of 18%.
Ans: “Paddle Wheel Aerators” (including its parts) which are manufactured and/or sold by the applicant and used exclusively in aquaculture operations (such as shrimp and fish farming) are classifiable under HSN 8479 and would attract GST 18% in terms of Sl. No. 366 of Schedule III to Notification No. 1/2017-Central Tax dtd. 28.06.2017, as amended, w. e. f. 01.07.2017 to 21.09.2025 and in terms of Sl. No. 464 of Schedule -II of Notification No. 9/2025-CT(R) dtd. 17.09.2025 w. e. f 22.09.2025
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