Cleaning of agricultural produce away from agricultural farm not entitled to GST exemption: AAR

Rara Udhyog, In re- [2018] 95 taxmann.com 118 (AAR- Rajasthan) 

The assessee is engaged into the activities of cleaning of the various agriculture produce like Saunf (Fennel) Dhaniya (Coriander), Jeera (Cumin seeds), etc. It removes the various impurities which do not change the essential character of the agriculture produce and makes the product marketable for primary market. It filed an application for Advance Ruling on the issue whether such activity would attract nil rate of tax? 

The Authority for Advance Ruling held that the exemption is available only on those processes which are carried at Agriculture Farm and which do not change the essential characteristics of the Agricultural Produce but only make it marketable for primary market. In the given case, the activity of cleaning using specific machines are installed at its premises, i.e., away from Agricultural farm. Therefore, the activity of the assessee will not attract nil rate of tax.