GST Exemption for Unprocessed Psyllium Seeds (Isabgol) in Gujarat
The Gujarat Authority for Advance Ruling confirmed that raw, unprocessed Psyllium seeds (Isabgol) are exempt from GST as 'fresh' agricultural produce.
- Ruling
- ADVANCE RULING NO. GUJ/GAAR/R/2026/21, dated 29.05.2026
- Dated
- 29 May 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 these seeds qualify as 'fresh' under Notification 10/2025.
- No processing, drying, or treatment was performed on the seeds.
- The seeds are exempt from GST when sold in their natural state.
In short
The company asked the Gujarat Authority for Advance Ruling (GAAR) whether raw Psyllium seeds (Isabgol) procured from farmers are exempt from Goods and Services Tax (GST). The authority decided that because the seeds remain in their natural, unprocessed state, they qualify as 'fresh' goods under the current tax notification. This means traders do not need to charge GST on these specific items when they are sold without any mechanical or chemical intervention.
What has changed
How it worked before
Traders were uncertain whether raw Isabgol seeds should be classified as 'fresh' or 'dried' for tax purposes, leading to confusion over whether they qualified for the NIL GST rate.
What has changed
The authority clarified that as long as the seeds are not dried, frozen, or processed, they fall under the 'fresh' category. This confirms that simple storage in a ventilated godown does not disqualify the product from the GST exemption.
Who this affects
Traders and suppliers of raw agricultural produce, specifically those dealing in Psyllium seeds (Isabgol) procured directly from farmers.
An example
A trader in Rajasthan buys raw Isabgol seeds from local farmers and stores them in a warehouse without cleaning or grading them. They want to know if they should charge GST on their sales. Based on this ruling, if their seeds remain in the same natural, unprocessed state as the Gujarat applicant's, they may argue that their goods are also exempt as 'fresh' produce.
What you should do
If you trade in similar raw seeds, you may use this ruling as a reference for your tax position. However, remember that an Advance Ruling is only legally binding on the business that requested it and its own tax office; it is not a universal law for all businesses.
If you do nothing
If you assume this ruling automatically applies to your business and stop charging GST, you risk a tax demand if your local officer disagrees with your classification. You could be held liable for the unpaid tax, plus interest and potential penalties. Always consult with your tax advisor to see if your specific operations match the facts of this ruling.
The terms explained
- Advance Ruling
- A formal decision provided by tax authorities to a specific business regarding how tax laws apply to their particular transaction.
- Agricultural Produce
- Produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fiber, fuel, raw material or other similar products.
- NIL rate
- A tax rate of zero percent, meaning no tax is collected on the supply of the goods.
The ruling in detail
Authority for Advance Ruling
M/s. Jigneshkumar Narayandas Patel (Trade name: Akshar Traders)
ADVANCE RULING NO. GUJ/GAAR/R/2026/21, dated 29.05.2026 · Gujarat
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) procured directly from farmers through APMC auctions. The applicant stores the seeds in dry and ventilated godowns without any processing, cleaning, grading, or treatment, and supplies them to processing units. The applicant maintains that the seeds remain in their natural, raw form from harvest through to supply.
Ruling
| Question | What the authority ruled |
|---|---|
| Exemption as fresh Isabgol seeds under Entry 87 | Yes, they qualify as fresh and are exempt under Entry 87 (HSN 1211) of Notification No. 10/2025-Central Tax (Rate). Applicable when supplied in natural, raw, and unprocessed form. |
| Exemption as goods of seed quality under Entry 77 | No, in view of the answer to Question 1. Not applicable as the primary exemption was granted. |
The Authority ruled that the Psyllium seeds supplied by the applicant in their natural, raw, and unprocessed state qualify as "fresh" and are therefore exempt from GST. Because the first question was answered in the affirmative, the alternative question regarding "goods of seed quality" was not required to be answered.
Reasoning
The Authority determined that Psyllium seeds are agricultural produce and that the applicant's process of procurement and storage does not constitute processing or treatment that would alter their natural state. By applying the analogy from Circular No. 169/19/2021-GST, the Authority concluded that the seeds remain "fresh" as they are not frozen, dried, or otherwise processed. Consequently, the seeds fall under the scope of Entry 87 of Notification No. 10/2025-Central Tax (Rate), which provides a **NIL rate of GST** for plants and parts of plants used in pharmacy that are fresh or chilled.
Provisions relied on
- Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025
- Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025
- Circular No. 169/19/2021-GST dated 06.10.2021
- Customs Tariff Act, 1975
For the practitioner
This ruling provides significant clarity for traders of Psyllium seeds, confirming that **unprocessed Isabgol seeds** procured through APMC auctions are exempt from GST under the "fresh" category. It helps practitioners argue against the classification of such seeds as "dried" or "processed" goods. However, it is limited to the specific facts of non-interventionist trading and does not apply if the seeds undergo any mechanical or chemical treatment.
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/7_jigneshkumar_narayandas_patel_0001_compressed_1_compressed_1.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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