Turmeric is not an agricultural product, but a spice, so 5% GST is appropriate. This statement was given by the Maharashtra Bench of GST-Authority for Advance Rulings (AAR) and GST has been implemented. Recently, a bench was approached to decide whether turmeric should be excluded from agricultural products.
On this, the bench in its decision said that the turmeric produced from the field is first boiled and cleaned by the farmers. It is then dried, polished and sold. So it is a spice. The Karnataka bench, on the other hand, recently exempted eggs from agricultural production as an agricultural product.
The petition was filed by Nitin Bapusaheb Patil. Patil is a recognized commission agent under the rules of the Maharashtra Agricultural Produce Market Committee (APMC). Their role is to conduct the auction under the supervision of an APMC officer and in the presence of farmers-traders.
If the price received in the auction is accepted by the farmer, they continue to act as intermediaries and facilitate the delivery of dry and polished turmeric. For such services, they receive a fixed commission of 3% from merchants as per APMC rules. The AAR wanted to know in their application whether their ancillary services would also be exempted from GST.
As per Notification No. 12/2017 of June 28, 2017, agricultural products means agricultural products grown for food, fiber, fuel, plant raw materials or animal husbandry (except horses). According to the notification, it is also imperative that such articles should not be processed further, or that such process should be undertaken by the farmer or producer so as not to alter the essential characteristics of the product and make it more marketable for the primary market.