GST on Psyllium Seeds: Rajasthan Authority for Advance Ruling RAJ/AAR/2026-27/04
The Rajasthan Authority for Advance Ruling decided that stored Psyllium seeds (Isabgol) are taxable at 5% and do not qualify for fresh produce exemption.
- Ruling
- ADVANCE RULING NO. RAJ/AAR/2026-27/04, 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 considered 'dried' rather than 'fresh'.
- The seeds are now subject to a 5% GST rate.
- Exemption claims under both Entry 87 and Entry 77 were rejected.
In short
The Rajasthan Authority for Advance Ruling (AAR) examined whether raw Psyllium seeds (Isabgol) kept in dry storage qualify for a GST exemption meant for fresh agricultural produce. The authority decided that because the seeds were stored in dry, ventilated godowns, they are classified as 'dried' goods rather than 'fresh' ones. This means the business must pay a 5% Goods and Services Tax (GST) on these supplies.
What has changed
How it worked before
Many traders assumed that raw agricultural produce procured directly from farmers and kept in standard storage remained 'fresh' and therefore exempt from GST.
What has changed
The authority clarified that the act of storing seeds in dry, ventilated conditions changes their classification from 'fresh' to 'dried'. In practice, this means traders can no longer claim the fresh produce exemption for stored Isabgol, making the supply taxable at 5%.
Who this affects
Traders and suppliers of agricultural produce who store goods in godowns before selling them.
An example
A trader buys raw cumin seeds from farmers and stores them in a dry warehouse for two months before selling. Based on this ruling, the tax department may argue that the cumin is 'dried' rather than 'fresh' and demand 5% GST. The trader should consult a tax professional to see if their specific storage method triggers a similar tax liability.
What you should do
If you trade in similar agricultural products, review your storage methods and tax filings. Remember that an Advance Ruling only legally binds the specific business that requested it and their local tax office; it is not a universal law for all businesses.
If you do nothing
If you assume this ruling does not apply to you and continue to claim an exemption, you risk a tax audit. If the tax officer disagrees with your classification, you may be liable for the unpaid 5% tax plus interest and potential penalties. Relying on an incorrect tax position can lead to significant financial strain during a scrutiny assessment.
The terms explained
- Advance Ruling
- A formal decision provided by tax authorities to a specific business regarding how tax laws apply to their particular situation.
- Fresh agricultural produce
- Goods that have not undergone any processing, preservation, or drying that would change their 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 Shrigopal Jaju
ADVANCE RULING NO. RAJ/AAR/2026-27/04, 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?
- 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 without performing any mechanical or chemical processing. The applicant contends that the seeds remain in their natural, raw, and unprocessed state, thus qualifying as fresh agricultural produce.
Ruling
| Question | What the authority ruled |
|---|---|
| Exemption under Entry 87 | No Goods are not considered fresh at the time of supply |
| Exemption under Entry 77 | No Specific entry 87 takes precedence over general entry 77 |
| Tax Rate | 5% Taxable under Notification No. 09/2025-Central Tax (Rate) |
The Authority held that the Psyllium seeds supplied by the applicant do not qualify as 'fresh' and are not exempt under Entry 87. Consequently, the alternative claim for exemption under Entry 77 was also rejected. The goods are held to be liable to tax at 5% under Notification No. 09/2025-Central Tax (Rate).
Reasoning
The Authority reasoned that the applicant's storage of seeds in dry and ventilated godowns renders them 'dried' rather than 'fresh'. It interpreted the term 'fresh' as excluding goods that have undergone any form of preservation or drying. The ruling relied on the distinction between fresh and dried goods in Notification No. 09/2025 and Notification No. 10/2025. It concluded that the applicant's goods fall under the category of dried seeds, which are **taxable at 5%**.
Provisions relied on
- Section 9 of the CGST Act, 2017
- Section 11 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
- Circular No. 163/19/2021-GST dated 06.10.2021
For the practitioner
This ruling clarifies that traders storing agricultural produce in dry godowns may lose the 'fresh' status required for GST exemption. It serves as a warning that **storage practices** can be interpreted as a form of drying, leading to tax liability. It does not provide a safe harbor for traders claiming exemption for stored agricultural commodities.
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/2-order_shrigopal_jaju.pdf
Legibility of the scan, as read: high.
Prepared 10-09-2026.
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