Supply of Service for Plantation of Mangroves Seeds and Seedlings in Coastal Areas attracts 18% GST: AAR [Read Order]

The supply of services for the plantation of mangrove seeds and seedlings in coastal areas attracts 18% GST, the West Bengal Authority of Advance Ruling (AAR) held as above.

The applicant, Raj Mohan Seshamani is in the business of cultivation, planting and nurturing of fruit trees in marginalised areas and mangrove seeds and seedlings in coastal areas across different states of the country with the sole aim of environmental protection against climate change.

The applicant has sought an advance ruling in respect of the SAC Code and GST Rate for the outward supply made by the applicant, in the case of fruit trees being cultivated and nurtured in marginalised communities.

The applicant claimed that he aimed to create sustainable livelihoods and provide nutritious food to the families and community residing in the nearby planting activities while aiming to enhance biodiversity and re-establish ecosystem function to protect the islands and the populace from erosion by way of planting mangrove seeds and seedlings.

A two-member bench of Brajesh Kumar Singh and Joyjit Banik observed that no GST is payable on the supply of services for the cultivation, planting and nurturing of fruit trees.

It was observed that the term "agriculture" receives a wider interpretation both about its operations as well as the results of such operations. The department contended that the service provided for other environmental protection services nowhere else classified will fall under chapter sub-heading 999490 and will attract 18% GST.

The authority observed that the applicant doesn't provide services for food, fibre, fuel, raw materials or other similar products or agricultural produce and the sole object of service was to enhance biodiversity and re-establish ecosystem function to protect the islands and the populace from erosion.

The authority held that such supplies of services may be treated as environmental protection services under chapter heading 9994 and shall not be covered under chapter heading 9986, being support services to agriculture, forestry, fishing, and animal husbandry.

To Read the full text of the Order CLICK HERE

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