Rajasthan AAR Rejects Fresh Seed Exemption, Holds Psyllium Seeds Taxable at 5%

In re Rajendra Prasad (GST AAR Rajasthan)

Facts and Background

The Rajasthan Authority for Advance Ruling, Goods and Services Tax, considered an application filed by M/s Rajendra Prasad Purshotamoodra, Jodhpur, concerning the classification of Psyllium Seeds (Isabgol) and the applicable GST treatment. The Advance Ruling is identified as RAJ/AAR/2026-27/06. The application was made under Section 97(2) of the Central Goods and Services Tax Act, 2017 and the corresponding Rajasthan Goods and Services Tax Act, 2017, particularly clauses (a) and (e), concerning classification of goods/services and determination of liability to pay tax.

The personal hearing was held on 13.07.2026, and the ruling is dated 29.07.2026. The applicant was represented by Mr. Ujwal Sharma (C.A.). The application concerned Psyllium Seeds (Isabgol) proposed to be procured directly from farmers through Agricultural Produce Market Committee (APMC) auctions in Rajasthan.

Applicant’s Business Process and Submissions

The applicant stated that it proposed to trade in Psyllium Seeds (Isabgol), commonly known as Isabgol, procured directly from farmers through APMCs. According to the applicant, the seeds would be procured without undertaking processing or subsequent value addition and would retain their natural characteristics.

The proposed process included procurement from farmers through standard agricultural procedures, storage of the seeds in designated godowns without mechanical or chemical processing, and supply to processing units where mechanical separation of husk from the seeds would subsequently take place. The applicant stated that it would not itself undertake processing.

The applicant submitted that the seeds would be harvested, threshed and packed in gunny bags in substantially the same condition as obtained from the farmers. It also stated that the seeds would not undergo artificial drying, freezing, roasting, crushing, polishing, grading or other industrial processing before supply to processing units.

The applicant relied upon the distinction between “fresh” and “dried” agricultural produce and submitted that Psyllium Seeds are naturally harvested agricultural produce and that inherent natural moisture should not result in their being treated as dried merely because they are stored in ordinary conditions.

Classification and Notifications Considered

The applicant referred to Chapter 12 of the Customs Tariff, 1975 and the relevant heading 1211. The order records that Psyllium Seeds (Isabgol) are covered under statutory provisions relating to plants and parts of plants, including seeds, and that the product was proposed to be classified under Heading 1211.

The ruling examined, among other provisions, Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 and Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Notification No. 10/2025-Central Tax (Rate) contains Entry No. 87 covering Heading 1211, relating to 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. The order also considered Entry No. 77 concerning “All goods of seed quality”.

Notification No. 09/2025-Central Tax (Rate) contains Entry No. 71 covering Heading 1211 for the corresponding category of goods, including those that are frozen or dried, whether or not cut, crushed or powdered, and prescribes a 5% GST rate.

Questions Before the Authority

The applicant sought rulings on two questions:

Classification as Fresh or Chilled

Whether Psyllium Seeds (Isabgol) supplied in their natural, raw and unprocessed form as procured through APMC auctions directly from farmers, without drying, freezing, crushing or other processing qualities, qualify as “fresh” Isabgol seeds and are exempt under Entry 87 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025.

Seed Quality Exemption

Alternatively, whether the Psyllium Seeds qualify as “goods of seed quality” and are exempt from GST under Entry 77 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025.

Applicant’s Submissions on the Nature of Psyllium Seeds

The applicant described Psyllium as an agricultural product obtained from the Plantago ovata plant. It submitted that the seeds are cultivated by farmers as a seasonal agricultural crop and harvested after reaching maturity.

The applicant stated that after harvesting, the plants are transported to farmers’ homes or farms, where the seeds are separated through threshing and collected. The seeds are then packed in ordinary gunny bags without chemical treatment, artificial preservation, dehydration, freezing, roasting, polishing, crushing, grading or other industrial processing.

The applicant further submitted that storage in APMC godowns was for preservation and that natural moisture was an inherent characteristic of the agricultural product. It argued that ordinary storage in dry and ventilated godowns should not amount to artificial drying.

The applicant also relied upon Circular No. 163/19/2021-GST dated 06.10.2021 concerning the distinction between fresh and dried agricultural products. The applicant contended that the clarification should support treating naturally harvested produce retaining its natural characteristics as fresh.

Revenue and Jurisdictional Officer’s Comments

The comments of the jurisdictional officer were called for by letter dated 25.06.2026. The order records that no comments were received.

Discussion and Findings of the Authority

The Authority considered the applicant’s submissions and the material placed before it, including the described procurement, harvesting, threshing, packing, transportation, storage and proposed supply process.

Effect of Storage Conditions

The Authority noted that the applicant proposed to store the Psyllium Seeds in dry and ventilated godowns. It observed that there was no information regarding any artificial drying process, but held that the purpose of storing the seeds in dry and ventilated godowns was to dry them and that, by the time the goods were supplied, they were “dried”.

The Authority therefore did not accept the applicant’s contention that the seeds remained “fresh” merely because no separate artificial drying process was undertaken.

Reliance on Circular No. 163/19/2021-GST

The Authority considered the clarification contained in Circular No. 163/19/2021-GST dated 06.10.2021 regarding fresh and dried agricultural products. The order records the circular’s discussion of fresh products as those not frozen or dried in any manner and the distinction between fresh and dried products.

The Authority did not accept the applicant’s reliance on the circular as sufficient to treat the Psyllium Seeds as fresh in the circumstances described in the application.

Consideration of Notification No. 09/2025-Central Tax (Rate)

The Authority examined Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and its Entry No. 71 covering Heading 1211. The ruling records that the entry covers the relevant plants and parts of plants, including seeds and fruits, of the specified kind, in the applicable forms including frozen or dried goods.

On the Authority’s findings that the Psyllium Seeds supplied by the applicant could not be regarded as “fresh”, the goods were considered under the applicable entry prescribing 5% GST.

Consideration of “Seed Quality” Exemption

The Authority also considered Entry No. 77 of Notification No. 10/2025-Central Tax (Rate), which covers “All goods of seed quality”. The ruling concluded that the Psyllium Seeds in question did not qualify for exemption under this entry.

Reference to the Gujarat AAR Ruling

The applicant had referred to the Advance Ruling of the Gujarat Authority for Advance Ruling in In re, Jigneshkumar Narayandas Patel (Trade Name: Akshar Traders), Advance Ruling No. GUJ/GAAR/R/2026/21 dated 29.05.2026.

The Gujarat ruling concerned Psyllium Seeds supplied in natural, raw and unprocessed form directly from farmers without drying, freezing or crushing and treated such seeds as “fresh” Isabgol seeds. The Rajasthan Authority considered that ruling while deciding the present application but did not adopt the same conclusion on the facts and circumstances before it.

Final Decision

The Rajasthan Authority for Advance Ruling answered both questions in the negative.

Question 1: The Psyllium Seeds supplied by the applicant in their natural, raw and unprocessed form were held not to qualify as “fresh” Isabgol seeds under Entry 87 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025. The ruling states that the seeds were covered by the applicable entry attracting 5% GST under Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Question 2: The Authority answered “No”, holding that the Psyllium Seeds did not qualify as “goods of seed quality” for exemption under Entry 77 of Notification No. 10/2025-Central Tax (Rate).

Thus, on the facts and material recorded in the supplied order, the Rajasthan AAR did not grant the claimed exemption for Psyllium Seeds as “fresh” or as “goods of seed quality” and determined the applicable GST treatment at 5%.

Cases Discussed

• In re, Jigneshkumar Narayandas Patel (Trade Name: Akshar Traders) (Gujarat AAR), Advance Ruling No. GUJ/GAAR/R/2026/21 dated 29.05.2026