Uttarakhand GST Advance Ruling on Rejected Wheat and Paddy Seeds
The Authority for Advance Ruling could not decide the tax rate for rejected seeds, referring the case to the Appellate Authority instead.
- Ruling
- Ruling No. 13/2018-19 dated 18.12.2018
- 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
- Sam Overseas asked for the GST rate on rejected wheat and paddy seeds.
- One member argued for a 5% tax rate as they are no longer seeds.
- Another member argued for a Nil tax rate based on their HS code.
- The authority reached a deadlock and referred the matter to the Appellate Authority.
In short
The company asked the Uttarakhand Authority for Advance Ruling (AAR) to clarify if 'rejected' wheat and paddy seeds—which are no longer fit for sowing—should be taxed as seeds or as general goods under the Goods and Services Tax (GST).
What has changed
How it worked before
Businesses were uncertain whether the 'rejected' status of seeds changes their tax classification from exempt seed status to a taxable category.
What has changed
The authority failed to reach a consensus, meaning no final tax rate was set. This highlights that when members disagree, the case is escalated to the Appellate Authority for a final decision.
Who this affects
Businesses dealing in agricultural products or seed distribution that handle rejected or non-sowing quality grains.
An example
A grain trader in Uttarakhand has a stock of rejected paddy seeds that failed quality tests. They might wonder if they should charge 5% GST or keep it exempt. Because this ruling is deadlocked, it does not provide a clear answer for the trader to follow.
What you should do
Do not treat this as a final rule, as it provides no guidance on the tax rate. Since this ruling is not binding on anyone other than the applicant and is currently unresolved, you should consult your tax advisor for your specific situation.
If you do nothing
If you assume a tax rate based on this unresolved case, you risk paying the wrong amount of tax. A tax officer may later disagree with your classification, leading to interest charges and penalties for short-payment of GST.
The terms explained
- HS Code
- A standardized numerical method of classifying traded products used by customs authorities to determine tax rates.
- Advance Ruling
- A written decision provided by tax authorities to a business on how GST laws apply to their specific transactions.
- Appellate Authority
- A higher-level tax body that reviews decisions made by the initial authority when there is a disagreement or an appeal.
The ruling in detail
Authority for Advance Ruling
M/s Sam Overseas, 32, VIM Square, Rudrapur
Ruling No. 13/2018-19 dated 18.12.2018 · Uttarakhand
Questions before the authority
- Classification and applicability of GST rate on 'Rejected Wheat Seed' and 'Rejected Paddy Seed'.
Facts
The applicant is engaged in the distribution of electricity and sought an advance ruling regarding the GST classification and tax rate applicable to 'Rejected Wheat Seed' and 'Rejected Paddy Seed'. The applicant contends that these items are no longer fit for sowing as seeds and require chemical treatment, thus losing their original character. The authority examined whether these goods fall under the category of seeds or general goods under the GST tariff.
Ruling
| Question | What the authority ruled |
|---|---|
| Rejected Wheat Seed and Rejected Paddy Seed | Divergent views Matter referred to the Appellate Authority for Advance Ruling under Section 98(5) |
The two members of the Authority for Advance Ruling held divergent views on the classification and taxability of the goods. Consequently, the authority could not reach a consensus and decided to refer the matter to the Appellate Authority for Advance Ruling for a final decision. No final tax rate was determined by this bench.
Reasoning
Member Vipin Chandra opined that since the seeds are rejected and unfit for sowing, they should be taxed at 5% as 'all other goods other than seed quality'. Conversely, Member Amit Gupta argued that the goods remain classified under HS Code 1001 and 1006 regardless of their 'rejected' status, and since those codes attract a 'Nil' rate, the supply should be exempt. The disagreement necessitated a reference to the Appellate Authority as per Section 98(5) of the CGST/SGST Act, 2017.
Provisions relied on
- Section 97(2)(a) of the CGST/SGST Act, 2017
- Section 98(5) of the CGST/SGST Act, 2017
- Section 100(1) of the CGST/SGST Act, 2017
- HS Code 1001
- HS Code 1006
For the practitioner
This ruling is **not a final determination** of the tax rate for rejected seeds, as the members reached a deadlock. Practitioners should note that the authority is split on whether 'rejected' status removes goods from the specific seed classification. It serves as a procedural example of how the authority handles **conflicting member opinions** by escalating the issue to the Appellate Authority.
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/uttrakhand_12-2018-19_sam_overseas.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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