The Central Board Indirect Taxes and Customs ( CBIC ) has issued a clarification on applicability of GST on the supply of Seed Certification Tags.
The Clarification issued on the process of seed testing and certification which involves the following steps:
The CBIC has clarified that “It may be seen from the above that seed testing and certification is a multi-stage process, the charges for which are collected from the seed producers at different stages. Supply of seed tags to the seed producer is nothing but an element of the one integrated supply of seed testing and certification”.
The CBIC also said that, “All the above charges, including those for issue of seed certificates/tags by the Seed Certification Agency of Tamil Nadu and Uttarakhand to the seed producing organization/ companies, are collected for the composite supply of seed testing and certification, which is exempt under Notification No. 12/2017-Central Tax (Rate) Sl. No. 47 (services by Central/State Governments by way of testing/certification relating to the safety of consumers and public at large, required under any law). This clarification would apply to the supply of seed tags by seed testing and certification agencies of other states also following similar seed testing and certification procedure”.
“However, the State Governments/Seed Certification Agencies may get the tags used in seed certification printed from other departments/ manufacturers outside. Supply of seed tags by the other departments/manufacturers to the State Government/Seed Certification Agencies is a supply of goods liable to tax. Whether such tags would be classified under Chapter 49 as tags made of paper or in Textile chapters as tags made of textile would depend upon the predominant material used in the tags”, the department also added.
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