The Authority for Advance Ruling (AAR), Karnataka ruled that the commissioner received from auctioning of flowers is exempted from Tax under Karnataka Goods and Services Tax act,2017.
The applicant states that they are in the business of auctioning flowers and are a commission agent for the flower growers. It is a joint venture company of private and public shareholders established to strike the potential of both export and domestic flower market With a prime objective to auction high-quality cut flowers of various flower Crops On a daily basis. It is engaged in facilitating growers to auction their flowers at its company and buyers would come in person and check quality and bid.
The applicant has presented sample copies of invoices where the applicant issues the invoices for further supply of goods on behalf of the principal. This shows that the provision of the goods by the growers to the applicant is covered under Entry 3 of Schedule I of the CGST Act, 2017.
The coram comprising of Additional Commissioner of Central Tax, Harish Dharnia and Joint Commissioner Of Commercial Taxes, Ravi Prasad M.P pronounced the order based on an application filed by International Flower Auction Bangalore.
The authority observed that the relationship between the applicant and the growers is that between a principal and its agent. The applicant is engaged in organizing the auction of the goods. However, the fact that the applicant has the authority to pass or receive the title of the goods on behalf of the principal shows that the applicant predominantly acts as the Commission agent.
The authority further said that the applicant is a commission agent within the meaning Of the term and he is providing services for Sale or purchase of agricultural produce, the same is covered under Clause (g) of entry no.54 and hence the services provided by the applicant is exempted from CGST.
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