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HomeBusinessGST News: Turmeric is agricultural product or not! Know what the...

GST News: Turmeric is agricultural product or not! Know what the government has to say

Highlights

  • GST-AAR gave an important decision on turmeric
  • Turmeric is a spice which will attract 5% GST
  • Turmeric is sold in the market after processing

New Delhi
The picture has become clear regarding the GST on turmeric. The Maharashtra Bench of the GST Authority for Advance Rulings (GST-AAR) has ruled that turmeric, a spice, will attract GST at the rate of 5 per cent. The question before the bench was whether turmeric is an agricultural product which will be exempted from GST.

But the GST-AAR in its decision said that the farmers first boil turmeric and then after drying, polish it and sell it in the market. This is contrary to the decision of the Gujarat Bench of GST-AAR. The Karnataka Bench of GST-AAR had also recently held that egg (in raw form) is an agricultural product which will not attract GST.

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What is Agricultural Produce
In the latest case, commission agent Nitin Bapusaheb Patil had applied. He used to conduct auctions under the supervision of an officer of the Agricultural Produce Market Committee (APMC) and in the presence of farmers and traders. If the auction price was acceptable to the farmers, he acted as an intermediate. For this he used to get 3 per cent commission from traders as per APMC rules. In his application to AAR, Patil also wanted to know whether his services would be exempted from GST.

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As per the notification dated June 28, 2017, any crop and animal husbandry (except horse) is an agricultural product. But there should not be any kind of processing on them, which will cause any change in their original form. GST-AAR stated that the applicant failed to prove that the farmers specialized processing turmeric in their own fields.

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