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.

Cases Discussed

In re Jiva Sciences Private Limited (GST AAR Gujarat) — The applicant referred during the personal hearing to an earlier Gujarat AAR ruling concerning classification and taxation of bovine semen sorting services. TaxGuru has separately reported that ruling, where the Gujarat AAR dealt with semen sorting services and Heading 9986. Read the TaxGuru report on In re Jiva Sciences Private Limited (GST AAR Gujarat).

Related statutory reference: The Authority’s discussion principally concerns Section 97 of the CGST Act, 2017 and the classification and rate provisions contained in Notification No. 11/2017-Central Tax (Rate). TaxGuru also maintains material coverage of the advance-ruling provisions under Sections 100 to 106. Advance Ruling – Sections 100 to 106 of the CGST Act.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, TAMILNADU

1. Any appeal against this Advance Ruling order shall lie before the Tamil Nadu State Appeliate Authority for Advance Ruling, Chennai under Sub-Section (1} of Section 100 of CGST Act 2017/TNGST Act 2017, within 30 days from the date on which the ruling sought to be appealed is communicated.

2. In terms of Section 103(1) of the Act, Advance Ruling pronounced by the Authority under Chapter XVII of the Act shall be binding only-

(a) On the applicant who had sought it in respect of any matter referred to in sub-section (2} Section 97 for advance ruling.

(b) On the concerned officer or the Jurisdictional Officer in respect of the applicant.

3. In terms of Section 103(2) of the Act, this Advance Ruling shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed.

4. Advance Ruling obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act.

5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act.

M/s Jiva Sciences Private Limited, having place of business at Shop No. 8, Complex No. 73, Brindavanam Thirumana Mandapam, Mappedu, Tiruvallur- 631402 (hereinafter called as the “Applicant”) has registered with GSTIN 33AADCJS5419J1ZL under the Goods and Services Tax Act. They have filed this application for advance ruling under Section 97 of the CGST Act, 2017, and corresponding provisions under the Section 97 of TNGST Act, 2017. The Applicant has made a payment of application fees of Rs.10,000/- under sub rule (1) of Rule 104 of CGST Rules, 2017 and TNGST Rules, 2017.

2. Statement of relevant facts having a bearing on the guestions raised.

The Applicant is engaged in the business of separating X & Y chromosomes bearing cells from Bovine Semen with technology intervention. They are rendering these services to certain semen stations, who are legal entities managing farms that have bulls, and produce semen straws which are used by veterinarian doctors for artificial insemination. The semen stations have Semen Processing Labs for production of un-sorted semen doses. Operations in the semen sorting lab are being managed by the applicant. All the people working in sorting lab are employees of the applicant. Raw Semen is collected by Semen Station from the bulls and given to the applicant in the semen sorting lab. The applicant processes this raw semen using its proprietary technology, and the unpacked processed material is given back to the semen station for further processing/packing and making of doses.

3. The applicant has filed the present application for advance ruling seeking clarification on the following questions:

a. Whether “Semen Sorting Services” would qualify as an exempt service under the GST, similar to the exemption granted to semen doses?

b. Can we classify “Semen Sorting Services” under SAC code 99867

c. In the absence of a specific notification or classification, under which HSN/SAC code should “Semen Sorting Services” be categorized?

4. Applicant’s interpretation of law:

The applicant has submitted their interpretation of classification as below:

a) SAC code 9986 is a broad category code under GST, and it includes support services to agriculture, hunting, forestry, fishing, mining, and utilities. In general sense, ‘rearing’ would mean to breed and look after animals on a farm or similar setting. The applicant is processing sperms which are a type of life form from which bovine animals emerge. In this business activity, the applicant gives nutrition to sperm cells to keep them healthy and fit for fertilization. The semen sorfing services are an intermediate step in the overall process of production of semen doses. The animals are eventually reared for milk — which is a form of food and raw material. Under these conditions, the semen sorting services can be interpreted as ‘rearing of life form’ as it involves nurturing of sperm cells to ensure that they remain healthy for fertilization.

b) The SAC code 998612, covers ‘Animal Husbandry Services’ and is taxable at GST rate of 18%. In light of the above, the Semen Sorting Services may get classified under this SAC code.

5. The applicant is under the administrative control of State. The concerned authorities of the Centre and State were addressed to report if there are any pending proceedings against the applicant on the issues raised by the applicant in the ARA application and for comments on the issues raised. As remarks have not been received from both the Centre and State authorities, it is assumed that there are no pending proceedings against the applicant on the issues raised by the applicant in the ARA application.

6. Personal Hearing

The applicant was given an opportunity to be heard in person on 06.07.2026. Shri. Ankit Agarwal appeared for the personal hearing as the authorized representative (AR) of the applicant. The AR reiterated the submissions made in their application for advance ruling. The AR added that the Order in respect of the Advance ruling application on an identical issue relating to ‘classification and taxation of the bovine semen sorting services’ filed by the applicant before the Hon’ble Gujarat Authority of Advance Ruling was pronounced vide Order No. GUJ/GAAR/R/2026/09 dated 031 March, 2026, wherein it was held that the above services are classifiable under Heading 9986 and are exempt from GST under the applicable exemption Notification.

7. Discussions and Findings:

7.1. We have carefully examined the submissions made by the applicant in their advance ruling application and the submissions made during the personal hearing. We have also considered the issue involved, the relevant facts and the applicant’s submission/interpretation of law in respect of question on which the advance ruling is sought.

7.2. We find that the query is liable for admission as it gets covered under Section 97 (2)(a), (b} and (e} of CGST/TNGST Act, 2017 under “Classification of any goods or services or both”, “applicability of a notification issued under the provisions of this Act” and “determination of the liability to pay tax on any goods or services or both” respectively.

7.3. We approach the questions raised by the applicant in the following order:

a) Can we classify “Semen Sorting Services” under SAC code 99867

b) In the absence of a specific notification or classification, under which HSN/SAC code should “Semen Sorting Services” be categorized?

c) Whether “Semen Sorting Services” would qualify as an exempt service under the GST, similar to the exemption granted to semen doses?

7.4. To begin with, we proceed to understand the “Semen Sorting Services” and see whether it is classifiable under SAC code 9986. We note that there are certain entities, known as semen stations who manage bull farms. The semen stations collect raw semen from the bulls and deliver the same to the semen labs located within their premises. In the semen lab, the applicant separates X & Y chromosome bearing cells from the Bovine Semen with their proprietary technology, and return the unpacked processed material to the semen stations.

7.5. Now we proceed to analyse the HSN 9986. As per Annexure: Scheme of Classification of Services to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, the service description of HSN 9986 is as below:

7.6. We note that as per Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, Heading 9986 covers ‘support services to agriculture, forestry, fishing, animal husbandry’. As per the Explanation to sl. No. 24(i) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, covering HSN 9986, “Support services to agriculture, forestry, fishing, animal husbandry” means-

(i) Services relating 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 by way of—

(a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing;

(b} supply of farm labour;

(c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun _ drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market;

(d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;

(e) loading, unloading, packing, storage or warehousing of agricultural produce;

(f) agricultural extension services;

(g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce.

(ii) Services by way of pre-conditioning, pre-cooling, ripening, waxing, _ retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables.

(iii) 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.

7.7. As per the above Explanation, “Support services to agriculture, forestry, fishing, animal husbandry” includes “(iii) 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.”

7.8. We now proceed to analyse if the ‘semen sorting services’ performed by the applicant fall within the definition of “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”.

7.9. We note that the ‘semen sorting services’ involves:

• receiving frozen or fresh semen from a semen station;
• processing the semen using technology;
• separating X-bearing and Y-bearing sperm;
• returning the sorted semen for further processing and packing into semen straws

7.10. We note that the applicant is engaged in sorting semen, which is an independent, laboratory-based, technology-driven processing service performed on semen. The applicant delivers the sorted semen to the semen stations, which is one step before, and does not constitute or directly support, the process of the actual rearing, feeding, breeding management, or husbandry of livestock. It is, in substance, a value-addition/testing and separation service performed on biological material. We therefore find that the services performed by the applicant does not fall under the definition of “Support services to agriculture, forestry, fishing, animal husbandry” as per the Explanation to sl. No. 24(i) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017, and therefore not classifiable under HSN 9986.

7.11. We now proceed to classify the services under the appropriate Heading. As per Annexure: Scheme of Classification of Services to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, HSN 9983 covers “Other professional, technical and business services” as below:

7.12. We note that Sex-sorting of semen using technology is, functionally, a specialised technical and scientific service. It is accordingly appropriately classifiable under the SAC 99834 as “Scientific and other technical services”. We now examine the subheadings of SAC 99834 as reproduced below:

7.13. We note that “Semen sorting services”, being a technology-based laboratory service, does not fall within any of the specifically enumerated entries from 998341 to 998348. It is accordingly appropriately classifiable under the residuary entry SAC 998349, being “Other technical and scientific services nowhere else specified”.

7.14. Having decided on the classification of “Semen sorting services” under HSN SAC 998349, we proceed to examine the applicable GST rate on the said services.

7.15. Serial No. 21 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 reads as below:

7.16. As per Serial No. 21 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, the Central tax rate for the services falling under HSN 9983 other than “Selling of space for advertisement in the print media” is 9%. It therefore follows that the total GST rate for the “Semen sorting services” is 18%, and therefore not an exempt service as claimed by the applicant.

8. In view of the above, we rule as under:

Ruling

1. Whether “Semen Sorting Services” would qualify as an exempt service under the GST, similar to the exemption granted to semen doses?

Answer: No. The semen sorting services are not exempt from payment of GST

2. Can we classify “Semen Sorting Services” under SAC code 9986?

Answer: “Semen Sorting Services” fall under SAC code 998349

3. In the absence of a specific notification or classification, under which HSN/ SAC code should “Semen Sorting Services” be categorized?

Answer: As in 2 above