GST Rate of 18% Applicable on Agricultural Implement Used Exclusively for Propagation of Plants: AAR

GST Rate of 18% Applicable on Agricultural Implement Used Exclusively for Propagation of Plants: AAR

M/S. Oruma Plastics Private Limited is the legal applicant in this case. The applicant is a company registered with the address 14/420F, Kinfra F block, Chapparapadavu, Kannur, Kerala-670581. M/s. Oruma Plastics Pvt Ltd is a taxpayer registered under the CGST/KSGST Act, involved in the manufacturing of “Rooter Trainer Cups.” The cup is mainly used for growing rubber plants, which is part of agricultural activity. The company is now asking the Kerala Authority for Advance Ruling (AAR) to clarify how this product, i.e., the Rooter Trainer Cup, should be classified under GST, and if yes, then what tax rate applies.

The company said that its product is used only for farming purposes, specifically for rubber plant nurseries. They also got a certificate from the Rubber Research Institute of India, which confirmed that this cup is important for rubber plant propagation and is recommended for agricultural use. The company pointed out that the cups are used by farmers and nurseries and are made from plastic. They even referred to a past AAR decision where plastic cups used for collecting rubber latex were treated as agricultural tools.

The company wants its product to be treated as a tax-exempt agricultural implement. They suggested that it should fall under HSN code 8201 9000, which covers hand tools used in agriculture and are exempt from GST.