The Karnataka Authority for Advance Ruling (AAR) has held that the supply of coir pith compost above 50kg bags are exempted from Goods and Service Tax (GST).
The Applicant, Lakshminarasimha Agro Products is a Partnership firm registered engaged in supply of coir pith compost. The Applicant purchased coir pith and then the same was processed and converted into either De- composed coir pith compost’ or ‘Sterilised coir pith compost’ which was used as manure for agriculture and horticultural crops.
The applicant has sought advance ruling as to whether rule 3(b) of Legal Metrology (Packaged commodities) Rules, 2011, provides that the provisions of Chapter II of that Rules shall not apply to cement, fertilisers and agricultural farm produce sold in above 50 kg bags. Whether the coir-pith compost, which is also the bio-fertilizer, sold by the registered person, falls under this category and is exempt from GST?
Y C Shivakumar on behalf of the applicant submitted the coir-pith compost was a fertiliser and also agricultural farm produce’ as provided under Rule 3(b) of Chapter II of Legal Metrology (Packaged Commodities) Rules, 2011. In such cases, the applicant would get exemption from GST as per notification number 7/2022-Central Tax (Rate), dated 13-07-2022, needed to sell the goods in 50kg above pre-packaged and labelled bags.
The Authority of M.P. Ravi Prasad (Member State) and Kiran Reddy (Member Central) held that the supply of Coir pith compost above 50kg Bags would be exempted from GST. it was further observed that,
“Rule 3(b) of Legal Metrology (Packaged commodities) Rules, 2011 says that these rules are not applicable to packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilisers sold in bags up to 50 kg Le Chapter II of that Rules shall not apply to fertilisers sold in above 50 kg bags and hence they are not exigible to GST if sold in above 50 kg bags.”
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