The applicant, M/s. Vallalar Borewells provide drilling of borewell services mainly to agriculturists engaged in raising of agricultural crops. Water is a part and parcel of essential requirements in cultivation and raising of agricultural crops. Likewise, compressors which are let out by them to agriculturists enable the motor to function and discharge water as required for cultivation and allied agricultural uses. They also obtain a confirmation letter from the agriculturist that the borewell drilled in their land is used only for the agricultural purpose.
The applicant sought advance ruling on the issue whether the following supply of services provided by the applicant are in relation to agricultural operations directly in connection with raising of agricultural produce.
The coram consists of Kurinji Selvan and B. Senthilvelavan ruled that Water-well drilling services are specifically covered under 995434 and the said category includes all Water-well drilling services without any exceptions. Therefore, it is evident that the drilling of borewells without exceptions (even in the agricultural land) is a construction service involving drilling water wells and not a support service for agriculture.
The AAR further ruled that a compressor is not an agricultural machinery and is a General-Purpose Machinery. Also, only provision of agricultural machinery with crew and operators are stated as ‘Support service for agriculture’. Therefore, letting out of the same is also not a ‘Support service for agriculture’ classifiable under SAC 9986 and the applicant is not eligible for exemptionSubscribe Taxscan AdFree to view the Judgment