Provision of services for planting mangrove seeds and seedlings in coastal areas attracts 18% TPS: AAR

Service Provision - Mangrove Seeds - Coastal Zones - TPS - AAR - taxscan

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

The applicant, Raj Mohan Seshamani is in the business of cultivation, planting and maintenance of fruit trees in marginalized areas and mangrove seeds and seedlings in coastal areas of different states of the country in the sole aim of protecting the environment against climate change.

The applicant requested an advance ruling regarding the SAC code and GST rate for the foreign supply made by the applicant, in the case of fruit trees grown and maintained in marginalized communities.

The claimant claimed that it aims to create sustainable livelihoods and provide nutritious food to families and the community residing in nearby plantation operations while aiming to enhance biodiversity and restore the function of the ecosystem to protect the islands and the population from erosion by planting mangroves. seeds and seedlings.

A bench consisting of two members, Brajesh Kumar Singh and Joyjit Banik, observed that no GST is payable on the provision of services for the cultivation, planting and maintenance of fruit trees.

It has been observed that the term “agriculture” is given a broader interpretation both in terms of its operations and the results of those operations. The department argued that the service provided for other environmental protection services that are not elsewhere classified will fall under subheading of Chapter 999490 and incur 18% GST.

The authority observed that the applicant does not provide services for food, fiber, fuel, raw materials or other similar agricultural products or products and that the sole purpose of the service was to enhance biodiversity and restore ecosystem function to protect islands and people. erosion.

The authority considered that these services can be treated as environmental protection services under heading 9994 and should not be covered under heading 9986, namely support services for agriculture, forestry, fishing and animal husbandry.

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In Re: M/s. RAJ MOHAN SECHAMANI

CITATION: 2022 TAXSCAN (AAR) 255

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