Page 106 - GSTL_16th July 2020_Vol. 38_Part 3

344 GST LAW TIMES [ Vol. 38
E.T.P. (only civil work) water supply/sanitary & plumbing, hard park,
internal/external electrification and all complete works as per the draw-
ing and specification on turnkey basis.
Part - B : Electro-mechanical work - This comprises of design, supply,
installation and commissioning of equipments including dairy plant,
utility/services, lab equipments, ETP (electromechanical works) etc. on
turnkey basis.
2. The applicant submitted that the dairy plant will be processing raw
milk obtained from the farmers and producing pasteurised milk as well as milk
products there from. The raw milk procured by the Dairy will be regarded as
‘agricultural produce’ and hence the said Dairy shall be covered as a ‘unit pro-
cessing agricultural produce’. The applicant has put the following question for
advance ruling in their application :-
“Does the Notification No. 20/2017-Central Tax (Rate) New Delhi, the 22nd
August, 2017 that covers the Composite supply of works contract as de-
fined in clause (119) of section 2 of the Central Goods and Services Tax Act,
2017, supplied by way of construction, erection, commissioning, or installa-
tion of original works pertaining to mechanised food grains handling system,
machinery or equipment for units processing agricultural produce as food stuff ex-
cluding alcoholic beverages, cover works contract for units processing milk (i.e.
Dairy and food processing industry)?”
3. The applicant has submitted that “agricultural produce” is neither
defined in the CGST ACT, 2017 nor defined in the Notification No. 20/2017-
Central Tax (Rate), dated 22nd August, 2017. However “agricultural produce” is
defined in the Notification No. 12/2017-Central Tax (Rate), dated 28th June,
2017. Relevant portion in Para 2 of the same is reproduced here under :
(d) “agricultural produce” means any produce out of cultivation of plants
and rearing of all life forms of animals, except the rearing of horses, for food,
fibre, fuel, raw material or other similar products, on which either no fur-
ther 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 it marketable for primary market;
4. The applicant has further submitted that from the above definition of
“agricultural produce”, it may be derived that since any produce out of rearing
of all life forms of animals except the rearing of horses, is considered as “agricul-
tural produce”, the produce out of rearing of animals for food may cover “Milk” as well.
Therefore “agricultural produce” may include “Milk” also for the purpose of No-
tification No. 20/2017-Central Tax (Rate), dated 22nd August, 2017. If it is so,
then the entry at item (v)(f) against Serial No. 3 of the table under the Notifica-
tion No. 11/2017-Central Tax (Rate), dated 28th June, 2017, as amended vide No-
tification No. 20/2017-Central Tax (Rate), dated 22nd August, 2017, for ‘Compo-
site supply of works contract as defined in clause (119) of Section 2 of the Central Goods
and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or
installation of original works pertaining to, mechanised food grain handling system, ma-
chinery or equipment for units processing agricultural produce as food stuff excluding
alcoholic beverages, may cover the composite supply of works contract for units pro-
cessing milk as well and accordingly benefit of lower rate of GST 12% (6% + 6%)
shall be available to the works contracts pertaining to the dairy industry in their case.

GST LAW TIMES  16th July 2020  106