Agriculture supplies are exempted from GST. Such supplies include fresh seafood, dairy, fruit, and
vegetables etc. Agricultural produce is defined under explanation (vii) of para 4 of notification No.
11/2017 Central Tax (Rate) dated 28.62017 as, “agricultural produce’ means any produce out of
cultivation of plants and rearing all life forms of animals, except the rearing of horses, for food, fiber, fuel,
raw material or other similar products, on which either no further processing is done or such processing is
done as is usually done by a cultivator or producer which does not alter its essential characteristics but
makes it marketable for primary market.
A question came before authority for advance ruling that whether sugarcane juice can be classified as
agriculture produce and therefore same should be exempted from GST. The sugarcane juice is produced
by way of crushing of sugarcane and hence not produced by farmer. Also processing of sugarcane for
making sugarcane juice alters its essential form and characteristics and changes are of such nature that
if it is to be attain the secondary market for use. Therefore, it is out of ambit of definition of “agriculture
produce”.
| SW Point of View:The tariff item 2009 contains specific description of fruit and vegetable juices, and sugarcane is neither fruit nor vegetable nor nuts, but it is covered under other parts of plants as such rule 3(a) of general rules for the interpretation of import tariff will apply and the same merits classification under HSN 20098990. Therefore, sugarcane juice is classified under chapter 20 and tariff item 20098990 which falls in Notification No. 1/2017 Central Tax (Rate) dated 28-06-2017 covered in schedule 2, Sr. No. 41 and taxable at a rate of 6% CGST & 6% SGST or 12 % IGST. |
Source: IN RE, M/S GOBIND SUGAR MILLS LIMITED : (2023) 07 CCHGST 0232 AARUP
