Classification of service— In the instant case, the applicant is seeking advance ruling on following question—

Whether the activity of custom milling of paddy is exempted from the purview of Goods and Service Tax? If it is exempted, in such case, under which exemption notification the same is exempted.

The applicant is seeking advance ruling regarding the activity of Custom milling of paddy to rice, claiming tax exemption on the same on the ground that the same is function entrusted to a panchayat under Article 243C of the Constitution of India.

The applicant neither forms a part of public distribution system of the state government nor panchayat body, therefore its activity of custom milling does not comes under entry No. 3A to Notification No, 12/2017- Central Tax (Rate) . Accordingly, the claimed benefit of tax exemption, citing reference of Circular No. 51/25/2018-GST dated 31/07/2018 is misplaced and thus we come to the conclusion that the applicants claim of any tax exemption on custom milling of paddy merit rejection.

Held that— The activity of custom milling of paddy carried out by the applicant is not exempted from the purview of Goods and Service Tax and is liable to GST at the rate of 5% (2.5% CGST and 2.5% CGGST).