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 /03, dated 27.07.2026
- Dated
- 27 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
- Surendra Bucha asked if raw Isabgol seeds qualify for a GST exemption.
- The Authority ruled that stored seeds acquire a dried character.
- The seeds are taxable at 5% under Notification No. 09/2025-CT.
- The claim for exemption as fresh agricultural produce was rejected.
In short
The company asked if Psyllium seeds (Isabgol) bought from farmers and stored in dry godowns qualify as 'fresh' produce, which would be exempt from Goods and Services Tax (GST). The tax authority examined whether storing these seeds in a dry environment changes their status from fresh to dried.
What has changed
How it worked before
Many traders assumed that raw agricultural seeds, even if stored in a warehouse, remained 'fresh' as long as they were not mechanically processed or chemically treated.
What has changed
The Authority decided that storing seeds in dry, ventilated godowns gives them a 'dried character.' Because they are no longer considered fresh, they do not qualify for the exemption and must be taxed at 5%.
Who this affects
Traders and suppliers of agricultural seeds who store their produce in warehouses before selling them to processing units.
An example
A trader in Gujarat buys raw cumin seeds from farmers and stores them in a dry warehouse for three months before selling them. Based on this ruling, the tax department might argue the cumin has lost its 'fresh' status due to the storage method. The trader should prepare for the possibility that these goods are taxable at 5% rather than exempt. They should document their storage conditions and consult their tax advisor to see if their specific process differs from this ruling.
What you should do
If you trade in similar seeds, do not assume they are exempt from GST. This ruling only applies to the company that asked; your local tax officer may have a different view, so consult a professional to review your specific storage and supply process.
If you do nothing
If you treat these goods as exempt without a clear legal basis, you risk a tax demand for unpaid GST plus interest and penalties. A tax officer may disagree with your classification during an audit, leading to costly disputes. Relying on a ruling that does not apply to you is not a valid defense in court.
The terms explained
- Advance Ruling
- A formal decision by the tax department on a specific question asked by a business. It only applies to that specific business and their tax office.
- Dried character
- A status assigned by tax authorities when goods are stored in a way that removes moisture, even if no mechanical drying machine was used.
- Exemption
- A provision in the tax law that allows certain goods or services to be sold without charging GST.
The ruling in detail
Authority for Advance Ruling
M/s SURENDRA BUCHA, WARD N 29, JORAWARPURA, NOKHA, Bikaner, Rajasthan-334001
ADVANCE RULING NO. RAJ/AAR/2026-27 /03, dated 27.07.2026 · 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 proposes to store these seeds in dry and ventilated godowns and supply them to processing units without undertaking any mechanical or chemical processing. The applicant contends that the seeds remain in their natural, raw, and unprocessed form and should be classified as fresh agricultural produce.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification as fresh Isabgol seeds under Entry 87 | No, not exempted Liable to tax @ 5% under Not. No. 09/2025-CT dt 17.09.2025 |
| Classification as goods of seed quality under Entry 77 | No In view of answer to Question 1 |
The Authority ruled that the Psyllium seeds supplied by the applicant do not qualify as "fresh" Isabgol seeds and are not exempt from GST. The Authority concluded that the seeds are liable to tax at 5% under Notification No. 09/2025-CT dated 17.09.2025. Consequently, the alternative claim for exemption under Entry 77 was also rejected.
Reasoning
The Authority reasoned that the applicant's storage of seeds in dry and ventilated godowns for an indefinite period renders them a **dried character**, thereby disqualifying them from being considered "fresh or chilled". It relied on the interpretation of "fresh" versus "dried" provided in Circular No. 163/19/2021-GST, emphasizing that exemption covers only products not frozen or dried in any manner. The Authority found that the seeds are squarely covered under Entry 71 of Schedule I of Notification No. 09/2025-Central Tax (Rate) as dried goods, which attracts a 5% GST 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 traders storing agricultural produce in dry conditions for an unspecified duration may lose the benefit of the "fresh" exemption, as the Authority may deem the goods to have acquired a **dried character**. It serves as a warning that the absence of documentary evidence regarding the duration of storage and the moisture content can lead to the denial of tax exemptions. Practitioners should note that this ruling is specific to the applicant and does not establish a binding precedent for other similar cases.
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/1-order_surender_bucha.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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