GST on Psyllium Seeds: Isabgol Not Exempt as Fresh Produce
The Rajasthan Authority for Advance Ruling decided that stored Psyllium seeds are considered dried, not fresh, and are subject to 5% GST.
- Ruling
- ADVANCE RULING NO. RAJ/AAR/2026-27/06, 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 as fresh produce.
- The Authority ruled that storing seeds in dry godowns makes them 'dried'.
- Dried Psyllium seeds are liable to 5% GST, not exempt.
- The claim for exemption as 'seed quality' goods was rejected.
In short
The company asked the Rajasthan Authority for Advance Ruling (AAR) if their raw Psyllium seeds (Isabgol) qualified for a GST exemption meant for fresh agricultural produce. They argued that because the seeds were unprocessed and bought directly from farmers, they should be treated as fresh. The Authority disagreed, noting that storing seeds in dry, ventilated godowns changes their status from 'fresh' to 'dried'.
What has changed
How it worked before
Many traders assumed that raw agricultural produce, like Isabgol seeds, remained exempt from GST as long as they were not physically processed, crushed, or altered.
What has changed
The Authority decided that the method of storage matters. By storing the seeds in dry conditions, the product is legally classified as 'dried' rather than 'fresh or chilled'. This means businesses must now pay 5% GST on these supplies instead of claiming a full exemption.
Who this affects
Traders and suppliers of agricultural produce who store goods in dry or ventilated warehouses before selling them.
An example
A trader in Gujarat buys raw cumin seeds from farmers and stores them in a dry warehouse for three months before selling. They might wonder if this ruling means their cumin is now taxable at 5%. Because this ruling is specific to a Rajasthan firm, the trader should not automatically apply it to their own business. They should seek their own professional advice to determine if their specific storage practices trigger a similar tax liability.
What you should do
If you trade in similar agricultural products, do not assume you are exempt based on this ruling. An Advance Ruling only binds the specific business that asked for it and their local tax office. You should consult with a tax professional to review your specific storage methods and tax classification to avoid unexpected GST liabilities.
If you do nothing
If you incorrectly claim an exemption based on this ruling, a tax officer may issue a demand for unpaid GST plus interest and penalties. Relying on a ruling that does not apply to you is not a valid legal defense during an audit. You could face significant financial costs for misclassifying your goods.
The terms explained
- Advance Ruling
- A formal decision provided by tax authorities to a specific business regarding how GST laws apply to their particular situation.
- Fresh or Chilled
- A tax category for agricultural produce that has not been dried, frozen, or processed, allowing it to remain in its natural state.
- HSN
- The Harmonized System of Nomenclature is a code used to classify goods for taxation purposes.
The ruling in detail
Authority for Advance Ruling
M/s RAJENDRA PRASAD PURSHOTAMMOONDRA
ADVANCE RULING NO. RAJ/AAR/2026-27/06, 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 via APMC auctions. The applicant stores these seeds in dry and ventilated godowns before supplying them to processing units for husk extraction. The applicant contends that the seeds remain in their natural, unprocessed state and should be classified as fresh agricultural produce.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification as fresh Isabgol seeds | No, liable to tax @ 5% Not exempt under Entry 87 of Notification No. 10/2025-Central Tax (Rate) |
| Exemption as goods of seed quality | No Not exempt under Entry 77 of Notification No. 10/2025-Central Tax (Rate) |
The Authority ruled that the Psyllium seeds supplied by the applicant do not qualify as "fresh" or "chilled" and are therefore not exempt from GST. The product is 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 storage of seeds in dry and ventilated godowns for an indefinite period effectively results in the product being "dried," thereby disqualifying it from the "fresh or chilled" exemption. It relied on the interpretation of Circular No. 163/19/2021-GST, which distinguishes between fresh and dried produce. The Authority concluded that the seeds are liable to 5% GST under Entry 71 of Schedule I of Notification No. 09/2025-Central Tax (Rate). It further noted that the specific entry for dried products takes precedence over general exemptions for seed quality.
Provisions relied on
- Section 97(2) of CGST/RGST 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 serves as a **cautionary precedent** for traders of agricultural produce who store goods in dry conditions, as the Authority may classify such goods as "dried" rather than "fresh." It clarifies that the **method of storage** can negate the benefit of tax exemptions intended for fresh agricultural produce. Practitioners should note that this decision specifically rejects the reliance on similar rulings from other states, emphasizing the factual determination of the product's condition at the time of supply.
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/4-order_rajendra_prasad_purshotammoondra.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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