Page 103 - GSTL_26th March 2020_Vol 34_Part 4

2020 ] IN RE : INTERNATIONAL FLOWER AUCTION BANGALORE LTD. 613
does not cultivate plants; does not supply farm labour; does not carry out the
processes carried out at an agricultural farm including tending, pruning, cutting,
harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting,
grading, cooling or bulk packaging and such like operations; does not rent or
lease agro machinery or land; does not offer services of loading, unloading, stor-
age, etc.; does not offer agricultural extension services; and is not an Agricultural
Produce Marketing Committee or Board.
8.2 The definition of “agriculture produce” as per para 2(d) of the Notifi-
cation 12/2017-C.T. (Rate), dated 28-6-2017 clearly states that “agriculture produce”
means any produce out of cultivation of plants and rearing of all life forms of animals,
except rearing of horses, for food, fiber, fuel, raw materials or other similar products, on
which either no further processing is done or such processing is done as is usually done
by a cultivator or producer which does not alter its essential characteristics but makes
marketable for the primary market.” The Appellant contended that the respondent
company is not a primary trader or a wholesaler.
8.3 The Appellant submitted that primary markets are those markets
which are located near centres of production of agricultural commodities and a
major portion of the produce is brought for sale by the producer-farmers them-
selves. Transactions in these markets usually take place between farmers and
primary traders. Secondary markets are those markets where specialized agen-
cies deal with sale and purchase of bulk arrivals from neighbouring plac-
es/districts and States. These markets also constitute commission agents, bro-
kers, etc. performing different marketing functions. The respondent company is
one of the auction places in India where variety of flowers are being auctioned
and buyers ranging from various exporters, wholesalers and retailers participate
daily in the flower auctions to purchase flowers which are then repackaged and
resold to end consumers or retail stores. The flowers are procured from the
growers located in and around Bangalore and also from other States. Therefore,
the Appellant submitted that the activity done by the respondent for sale and
purchase of flowers including flower verification, cold room service and software
service to the growers and also provision of Wi-fi software and flower display
etc. for marketing in both domestic and international market does not constitute
dealing of agriculture produce in primary market.
8.4 The Appellant further submitted that in terms of Section 2(5) of the
CGST Act, 2017, an agent means a person, including a factor, broker, Commission
Agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by
whatever name called, who carries on the business of supply or receipt of goods or ser-
vices or both on behalf of another.” As per Finance Act, 1994 “Commission Agent”
means any person who acts on behalf of another person and causes sale or pur-
chase of goods, or provision or receipt of services, for a consideration and in-
cludes any person who, while acting on behalf of another person -
(i) Deals with goods or services or documents of title to such goods or
services; or
(ii) Collects payment of sale price of such goods or services; or
(iii) Guarantees for collection or payment for such goods or services; or
(iv) Undertakes any activities relating to such sale or purchase of such
goods or services.
It is submitted that in this case the respondent does not act on behalf of another
person for auctioning the goods, but is acting only as a mediator between the
GST LAW TIMES  26th March 2020  199