The applicant is providing the marketing service for Rice millers and traders supplying both branded and unbranded rice on a commission basis, hence the applicant is required to register in terms of section 22 of CGST Act, 2017 and is also required to discharge GST @18%.
Levy of GST— In the instant case, the applicant is a Rice canvassing commission agent for rice millers and traders and are selling Agricultural Produce (Rice) as per the Agricultural Produce Marketing Committee Act (APMC Act) of the State.
The applicant has sought advance ruling in respect of the following questions:
1. Whether the applicant is entitled to collect GST on Supply of services which pertains to selling of agricultural produce as per APMC Act?
2. Is there any special case where the applicant has to collect GST on the Service provided (Branded and unbranded)?
In the instant case the product viz., rice is a product of milling process involving de-husking, steaming, de-browning, polishing, sorting etc. of paddy, which is a produce out of cultivation of plants. Thus, both rice and paddy are produce out of cultivation of plants. But rice and paddy are not the same as rice is the outcome of milling process of paddy. While rice is readily consumable, paddy when subjected to milling processes yield rice, husk and rice barn. Milling process is not normally done by the paddy producer or cultivator, but is undertaken by the millers. Milling process also changes the essential characteristics of the produce from paddy to rice, which are both distinctly identifiable and separately marketable commodities. Thus, the criteria (ii), and (iv) above are not satisfied in the instant case, in as much as the processing is not done by the cultivator or the producer and the essential character of the produce has also undergone change. Therefore, rice cannot be treated as agricultural produce in terms of para 2(d) of the Notification 12/2017, and the commission agent services for sale or purchase of rice does not fall in the ambit of SI.No. 54 of the Notification 11/2017-CT(Rate) dtd 28.06.2017 and therefore not eligible for any exemption from levy of GST.
The activity of the applicant in the instant case viz., the activity of canvassing for Rice as 'Commission Agent' is covered under SAC 9961. Further, the applicant is only charging service charges and not issuing sale invoices on behalf of the principals. Hence the activities of Commission Agent by canvassing for Rice by the applicant attracts Central Tax-CGST @ 9% and KGST @ 9% towards marketing of ‘Rice' including 'branded Rice' also.
Held that— The applicant is liable to collect CGST @ 9% and KGST @ 9% on supply of services relating to sale or purchase of rice.
The applicant by canvassing for Branded and unbranded rice of millers and other traders is liable to pay CGST @ 9% and KGST @ 9% on the consideration received or receivable as commission from the rice miller or traders.
The applicant is providing the marketing service for Rice millers and traders supplying both branded and unbranded rice on a commission basis, hence the applicant is required to register in terms of section 22 of CGST Act, 2017 and is also required to discharge GST @18%.
Levy of GST— In the instant case, the applicant is a Rice canvassing commission agent for rice millers and traders and are selling Agricultural Produce (Rice) as per the Agricultural Produce Marketing Committee Act (APMC Act) of the State.
The applicant has sought advance ruling in respect of the following questions:
1. Whether the applicant is entitled to collect GST on Supply of services which pertains to selling of agricultural produce as per APMC Act?
2. Is there any special case where the applicant has to collect GST on the Service provided (Branded and unbranded)?
In the instant case the product viz., rice is a product of milling process involving de-husking, steaming, de-browning, polishing, sorting etc. of paddy, which is a produce out of cultivation of plants. Thus, both rice and paddy are produce out of cultivation of plants. But rice and paddy are not the same as rice is the outcome of milling process of paddy. While rice is readily consumable, paddy when subjected to milling processes yield rice, husk and rice barn. Milling process is not normally done by the paddy producer or cultivator, but is undertaken by the millers. Milling process also changes the essential characteristics of the produce from paddy to rice, which are both distinctly identifiable and separately marketable commodities. Thus, the criteria (ii), and (iv) above are not satisfied in the instant case, in as much as the processing is not done by the cultivator or the producer and the essential character of the produce has also undergone change. Therefore, rice cannot be treated as agricultural produce in terms of para 2(d) of the Notification 12/2017, and the commission agent services for sale or purchase of rice does not fall in the ambit of SI.No. 54 of the Notification 11/2017-CT(Rate) dtd 28.06.2017 and therefore not eligible for any exemption from levy of GST.
The activity of the applicant in the instant case viz., the activity of canvassing for Rice as 'Commission Agent' is covered under SAC 9961. Further, the applicant is only charging service charges and not issuing sale invoices on behalf of the principals. Hence the activities of Commission Agent by canvassing for Rice by the applicant attracts Central Tax-CGST @ 9% and KGST @ 9% towards marketing of ‘Rice' including 'branded Rice' also.
Held that— The applicant is liable to collect CGST @ 9% and KGST @ 9% on supply of services relating to sale or purchase of rice.
The applicant by canvassing for Branded and unbranded rice of millers and other traders is liable to pay CGST @ 9% and KGST @ 9% on the consideration received or receivable as commission from the rice miller or traders.