GST on Psyllium Seeds: Rajasthan AAR Ruling RAJ/AAR/2026-27/05
The Authority for Advance Ruling decided that stored Psyllium seeds (Isabgol) are not 'fresh' and are subject to 5% GST.
- Ruling
- RAJ/AAR/2026-27/05, dated 29.07.2026
- Dated
- 29 Jul 2026
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The company asked if raw Isabgol seeds are exempt from GST.
- The Authority ruled that stored seeds are 'dried', not 'fresh'.
- The supply of these seeds is taxable at 5% GST.
- The claim for exemption as 'goods of seed quality' was rejected.
In short
The company asked the Authority for Advance Ruling (AAR) if their raw Psyllium seeds (Isabgol) qualify for a GST exemption meant for 'fresh' agricultural produce. Because the company stores these seeds in godowns before selling them, the Authority decided they are 'dried' rather than 'fresh'.
What has changed
How it worked before
Many traders assumed that raw, unprocessed agricultural seeds procured directly from farmers remained 'fresh' for tax purposes regardless of storage.
What has changed
The Authority ruled that storing seeds in a godown changes their status from 'fresh' to 'dried'. This means traders must now pay 5% GST on these sales instead of claiming an exemption.
Who this affects
Traders and suppliers of agricultural seeds like Psyllium (Isabgol) who store their produce in warehouses or godowns before sale.
An example
A trader named GreenSeeds buys raw Isabgol from farmers and keeps it in a ventilated warehouse for two months before selling it. They might wonder if they can claim the 'fresh' produce exemption. Based on this ruling, the tax department would likely view their stored seeds as 'dried' and require them to pay 5% GST.
What you should do
If you trade in similar seeds, you should review your tax classification with a professional. Remember that an Advance Ruling only binds the specific business that asked and their local tax office; it is not a general law for all businesses.
If you do nothing
If you assume this ruling does not apply to you and stop paying GST on your sales, you risk a tax audit. If an officer disagrees with your classification, you may face demands for unpaid tax, interest, and penalties. It is safer to confirm your specific tax position rather than relying on an assumption.
The terms explained
- Advance Ruling
- A formal decision from the tax department that answers a specific question for one business.
- HSN
- A system of codes used to classify goods for tax purposes.
- Exemption
- A rule that allows a business to not pay tax on a specific type of sale.
The ruling in detail
Authority for Advance Ruling
M/s JAI MATA DI
RAJ/AAR/2026-27/05, dated 29.07.2026 · Rajasthan
Questions before the authority
- Whether Psyllium Seeds (Isabgol) supplied in their natural, raw and unprocessed form as procured through Agricultural Produce Market Committee (APMC) auctions directly from farmers, without undergoing any drying, freezing, crushing or other processing qualifies as "fresh" isabgol seeds and are exempted under Entry 87 (HSN 1211) of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 as "Plants and parts of plants (including seeds and fruits) of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled"?
- Alternatively, whether Psyllium Seeds (Isabgol) as discussed above qualifies as "goods of seed quality" and are exempt from GST under Entry 77 (HSN 12) of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025?
Facts
The applicant is a proprietorship firm engaged in the trading of Psyllium seeds (Isabgol). They procure these seeds directly from farmers through APMC auctions and propose to supply them to processing units without performing any mechanical or chemical processing. The applicant contends that the seeds remain in their natural, raw, and unprocessed form as harvested.
Ruling
| Question | What the authority ruled |
|---|---|
| Exemption as 'fresh' isabgol seeds under Entry 87 | No, not exempt Liable to tax at 5% under Notification No. 09/2025-Central Tax (Rate) |
| Exemption as 'goods of seed quality' under Entry 77 | No, not exempt In view of the answer to Question 1 |
The Authority ruled that the Psyllium seeds supplied by the applicant do not qualify as 'fresh' and are not exempt from GST. Consequently, the supply is liable to tax at the rate of 5% under the relevant notification. The alternative claim for exemption under the 'goods of seed quality' entry was also rejected.
Reasoning
The Authority reasoned that the applicant stores the seeds in dry and ventilated godowns, which renders them 'dried' rather than 'fresh' at the time of supply. It relied on the interpretation that 'fresh' agricultural produce refers to goods in the state as plucked, whereas the applicant's process involves storage that leads to a reduction in moisture. The ruling turned on the classification under HSN 1211 and the specific scope of exemptions provided in Notification No. 09/2025-Central Tax (Rate) and Notification No. 10/2025-Central Tax (Rate). The Authority concluded that the seeds are 'dried' and thus fall under the taxable entry rather than the exemption for fresh or chilled goods.
Provisions relied on
- Section 9 of the CGST Act, 2017
- Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025
- Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025
- HSN 1211
For the practitioner
This ruling clarifies that traders of Psyllium seeds who store their produce in godowns before supply cannot claim the **exemption for 'fresh' agricultural produce**. Practitioners should note that the Authority views the storage process as rendering the goods 'dried', thereby attracting a **5% GST rate**. This decision highlights the strict interpretation of 'fresh' versus 'dried' goods for GST exemption purposes.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/3-order_jai_mata_di_f.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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