GST on Isabgol Seeds: Rajasthan Advance Ruling RAJ/AAR/2026-27/07
The Rajasthan Authority for Advance Ruling decided that stored Psyllium seeds are not 'fresh' and are subject to 5% GST.
- Ruling
- ADVANCE RULING NO. RAJ/AAR/2026-27/07, 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 were exempt from GST.
- The authority ruled that stored seeds are not 'fresh' produce.
- The seeds are now taxable at 5% GST.
In short
The company asked if Psyllium seeds (Isabgol) bought at auctions and stored in godowns qualify as 'fresh' and tax-exempt under GST. The authority decided that because the seeds were dried during storage, they no longer count as fresh produce.
What has changed
How it worked before
Many traders assumed that agricultural produce remains 'fresh' and exempt from GST as long as it has not undergone mechanical processing like crushing or freezing.
What has changed
The authority ruled that storing seeds in dry, ventilated godowns constitutes a drying process. This means the seeds lose their 'fresh' status and become taxable at 5% under the current GST rate notifications.
Who this affects
Traders and suppliers of agricultural produce who store goods in godowns before selling them.
An example
A trader in Gujarat buys cumin seeds from farmers and stores them in a warehouse for two months before selling. They might wonder if this ruling means their cumin is taxable. Based on this decision, the tax department could argue that the storage process dried the seeds, making them ineligible for the 'fresh' exemption.
What you should do
If you trade in similar agricultural goods, do not assume they are exempt based on this ruling. An advance ruling only applies to the specific business that asked for it and their local tax office; it is not a general law for all businesses.
If you do nothing
If you treat your goods as exempt when they are actually taxable, you risk a tax demand, interest, and penalties. A tax officer may disagree with your classification during an audit, leading to a costly legal dispute.
The terms explained
- Advance Ruling
- A formal decision from the tax department that answers a specific question about how GST applies to a business's transactions.
- Fresh produce
- Agricultural goods that have not been processed, dried, or preserved in a way that changes their natural state.
- HSN
- A system of codes used to classify goods for taxation purposes.
The ruling in detail
Authority for Advance Ruling
M/s Mahavir Parsad Agarwal
ADVANCE RULING NO. RAJ/AAR/2026-27/07, 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) procured directly from farmers through APMC auctions. The applicant stores these seeds in dry and ventilated godowns before supplying them to processing units for mechanical husk separation. The applicant contends that the seeds remain in their natural, raw, and unprocessed state throughout this process.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification as fresh Isabgol seeds under Entry 87 | No, not exempt Liable to tax at 5% under Notification No. 09/2025-CT dated 17.09.2025 |
| Classification as goods of seed quality under Entry 77 | No 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 under the cited notifications. Consequently, the goods are liable to tax at 5% under the relevant notification. The alternative claim for exemption as "goods of seed quality" was also rejected.
Reasoning
The Authority reasoned that the applicant's practice of storing seeds in dry and ventilated godowns effectively subjects them to a drying process, thereby removing them from the category of "fresh" or "chilled" produce. It relied on Circular No. 163/19/2021-GST, which clarifies that products dried in any manner do not qualify for the exemption intended for fresh produce. The Authority concluded that the seeds are not "fresh" at the time of supply and thus fall under the taxable category of 5% under Entry 71 of Schedule I of Notification No. 09/2025-Central Tax (Rate).
Provisions relied on
- Section 97(2) of CGST/SGST Act, 2017
- Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025
- Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025
- Circular No. 163/19/2021-GST dated 06.10.2021
For the practitioner
This ruling clarifies that the **storage of agricultural produce in dry conditions** may disqualify it from the "fresh" exemption under GST, even if no mechanical processing occurs. It serves as a warning for traders of agricultural commodities who store goods before supply. It does not decide the taxability of goods that are truly supplied immediately after harvest without any storage-induced drying.
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/5-order_mahavir_prasad_agarwal.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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