The Tamil Nadu Authority of Advance Ruling (AAR) held that letting out of compressors for pumping of water from borewells to agricultural fields is not ‘Support Service for agriculture.
The applicant, M/s. Aravind Drillers provide drilling of borewell services mainly to agriculturists engaged in raising of agricultural crops. Water is a part and parcel of essential requirements in cultivation and raising of agricultural crops. Likewise, compressors which are let out by them to agriculturists enable the motor to function and discharge water as required for cultivation and allied agricultural uses. They also obtain a confirmation letter from the agriculturist that the borewell drilled in their land is used only for the agricultural purpose.
The applicant has sought the advance ruling whether the following supply of services provided by the applicant are in relation to agricultural operations directly in connection with raising of agricultural produce namely, drilling of Borewells for supply of water for agricultural operations like cultivation including seeding, planting and ploughing and letting out of compressors for pumping of water from the borewells to the agricultural fields.
The applicant further stated that if the answer to the question is in the affirmative, whether the said services are covered by the entry Sl.No. 54 of Notification 12/2017-CT(Rate) dated June 28, 2017.
The coram consists of Kurinji Selvan and B. Senthilvelavan ruled that drilling of Borewells for supply of water in agricultural land is not ‘Support Service for agriculture classifiable under ‘SAC 9986’.
The AAR further ruled that letting out of compressors for pumping of water from the borewells to the agricultural field is not ‘Support Service for agriculture classifiable under `SAC 9986’.
Therefore, the AAR held that the two activities of the applicant are not ‘Support service for agriculture’ classifiable under SAC 9986 and therefore the exemption at SI.No.54 of Notification No.12/2017-C.T.(Rate) is not applicable to the tivities of the applicant.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in
