Classification of goods— This Appeal has been filed against Advance Ruling Order pronounced by the West Bengal Authority for Advance Ruling.
The Appellant is engaged in the business of cultivation, planting and nurturing of mangrove seeds and seedlings like Viviparous and Pseudoviviparous groups in the coastal areas across different states of the country as per contracts awarded by internationally acclaimed environmental organizations.
The Appellant sought an advance ruling under section 97 of the GST Act on the following question:
What would be SAC Code & GST Rate for the outward supply made by the applicant, in case of mangroves being cultivated and nurtured at coastal communities?
The WBAAR made observation that the appellant does not provide such services for food, fibre, fuel, raw material or other similar products or agriculture produce rather the sole object of the services as it has been claimed by the applicant is to enhance biodiversity and re-establish ecosystem function to protect the islands and the populace from erosion. The WBAAR was therefore of the opinion that such supply of services will not get covered under chapter Heading 9986 being ‘support services to agriculture, forestry, fishing, animal husbandry’ but may be treated as ‘environmental protection services’ under chapter Heading 9994.
It is evident that the appellant is engaged in business of cultivation, planting and nurturing of mangrove seeds and seedlings for the primary purpose of environmental protection by way of enhancing biodiversity and re-establishing the ecosystem functions and such services are not related to cultivation of plants for food, fibre, fuel, raw material or other similar products. Therefore, none of the activities carried out by the appellant for the purpose as laid down in the agreement qualifies to be agriculture as claimed by him which is essential to be classified under SAC 9986. In our opinion, the services rendered by the appellant can be classified as ‘Other environmental protection services’ and not as ‘Support services to agriculture, forestry, fishing, animal husbandry’.
In view of above discussion, we find no infirmity in the ruling pronounced by the WBAAR being that the supply of services for plantation of mangrove seeds and seedlings in coastal areas shall be covered under Serial Number 32 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 having SAC 9994 and shall attract GST @ 18%.
Held that— The WBAAR Ruling is confirmed. The appeal thus fails and stands disposed.