Classification of service— In the instant case, the applicant has entered into an agreement with the District Controller of Food and Supplies, Government of West Bengal for supply of fortified wholemeal atta. 

According to the said agreement, the State Govt. sends the whole, unpolished food grain to the applicant for crushing and processing it into flour. The applicant returns the flour(atta) packed in the manner as the State Govt. requires by fortifying the crushed grain with the vitamin which is then distributed through the Public Distribution System (PDS) by the State Govt on behalf of Food and Supplies Department, Govt of West Bengal.

Following questions raised for advance ruling—

a. Whether the instant composite supply of service by way of milling of food grains into flour to Food & Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System is eligible for exemption under entry No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017?

b. What shall be rate of GST on such milling, if it does not fall under entry No. 3A?

The applicant has been selected for empanelment for crushing of wheat into wholemeal atta and fortify it by premixing of micro-nutrients containing Iron, Folic acid and Vitamin to a specific percentage.

The applicant has submitted that he gets non-cash consideration in the form of being allowed to retain 4 kgs of bran and 1 kg of refractor which is sold in the open market realizing Rs.99.24. Further Rs.43/- is realized by selling of gunny bags, which are retained by him.

Held that— The instant composite supply of service shall qualify for exemption vide serial 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 [corresponding West Bengal State Tax Notification No. 1136-FT dated 28.06.2017].