Semen Sorting Services Classified Under SAC 998349, Taxable at 18% GST: AAR Tamilnadu

In re Jiva Sciences Private Limited (GST AAR Tamilnadu)

Summary: The Tamil Nadu Authority for Advance Ruling examined the GST classification and taxability of semen sorting services provided by Jiva Sciences Private Limited. The applicant processes raw bovine semen collected by semen stations and uses proprietary technology to separate X and Y chromosome-bearing sperm cells before returning the processed material to the semen stations for further processing and packing into semen doses. The applicant sought classification under SAC 9986 and exemption on the basis that the activity constituted support services to agriculture, forestry, fishing and animal husbandry. The Authority admitted the application under Section 97(2)(a), (b) and (e) of the CGST/TNGST Acts concerning classification, applicability of a notification and determination of tax liability. Referring to Notification No. 11/2017-Central Tax (Rate), the Authority examined Heading 9986 and its Explanation concerning support services to agriculture, forestry, fishing and animal husbandry, including intermediate production processes carried out as job work in relation to rearing of animals.

It held that semen sorting is an independent, laboratory-based, technology-driven processing service performed on biological material and does not constitute or directly support actual rearing, feeding, breeding management or husbandry of livestock. Accordingly, the services were held not classifiable under SAC 9986. The Authority instead classified the services under SAC 998349, “Other technical and scientific services nowhere else classified”, under Heading 9983. Applying Serial No. 21 of Notification No. 11/2017-Central Tax (Rate), the Authority held that the services attract 9% CGST and, correspondingly, 18% total GST. The claim of exemption similar to exemption available to semen doses was therefore rejected. The ruling answers the three questions by holding that semen sorting services are taxable, classifiable under SAC 998349, and not exempt from GST.