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GST on Supply of Seed Certification Tags

Seed Certification Tags

GST on Supply of Seed Certification Tags

Recently, the Central Board of Indirect Taxes and Customs issued circular no. 100/19/2019-GST dated 30th April 2019 clarifying the GST applicability on the Seed Certification Tags. In this article, we look at the process of seed testing and certification followed in the state of Tamil Nadu. It should be noted that the process is being described to understand the stages during which the processing fees are being collected and the applicability of GST.

Sr. No. Steps Description
1 Application for production of seeds

An application for registration of the crop and season needs to be done with the Assistant Director of Seed Certification. An applicant needs to pay the registration fee of INR 25 and also prescribed certification charges.

Fees so paid is for single crop variety for an area up to 25 acres and for a single season.

2 Registration of sowing report Assistant Director of Seed Certification scrutinizes the application and registers the seed farm. He assigns a seed certification number for each sowing report.
3 Field inspection Seed Certification Officer carries out the field inspection.
4 Processing of seeds After harvesting of the seeds from the seed farm, the same is taken to approved seed processing unit. Seed lot should be accompanied by the processing report. Seed certification officer verifies the processing plant to check the possibility of a mechanical mixture.
5 Seed sample and analysis

Seed sample needs to be sent to the testing laboratory and fees of INR 30 needs to be paid during the registration of seed farm.

An applicant is required to pay a fee of INR 200 to analyze the genetic purity of the seed sample.

Further INR 3 needs to be paid for a white colour label for foundation seeds and INR 2 needs to be paid for the blue colour label for certified seeds.

6 Final tagging and sealing Approved seed lots need to be tagged with the certification tag. In case of delay in tagging, late fees of INR 50 is payable. Further, seed analysis fees of INR 30 is also payable.

Similarly, the state of Uttarakhand also carries out the process of seed testing and certification, however, the charges collected varies as against the charges collected by the State of Tamil Nadu.

GST Notification

The notification pertaining to the applicability of GST on Seed Certification Tags is reproduced below for ready reference:

Seed Certification Tag

GST Implications

No. 47 of notification no. 12/2017- Central Tax (Rate) dated 28th June 2017 provides an exemption to services by the central / state government by way of testing/certification relating to the safety of consumers and the public at large. Hence, the charges so collected stands exempt as per sr. no. 47 of notification no. 12/2017- Central Tax (Rate) dated 28th June 2017.

Circular no. 100/19/2019 – GST dated 30th April 2019 it has been clarified that the exemption contained in sr. no. 47 of notification no. 12/2017 – Central Tax (Rate) dated 28th June 2017 applies to the supply of seed tags by seed testing and certification agencies of all the states who are following similar seed testing and certification procedure as mentioned above. Circular also clarifies that in case the State Government gets the tags, which are used for seed certification, printed from other departments / outside manufacturers, then, such supply of tags by the manufacturers to the State Government is a supply of goods and is liable to be taxed.