Karnataka AAR Decides No GST Applicable on Tree Pruners

The Karnataka AAR, in the matter of In Re. M/s. Global Marketing [KAR ADRG 02/2024 dated January 29, 2024], determined that Tree Pruners, classified under HSN Code 8201 6000 as an agricultural tool, are exempt from GST as per Entry No. 137 of Notification No. 2/2017-Central Tax (Rate) dated June 28, 2017 (“the Goods Rate Exemption Notification”).

Facts:

Global Marketing, a partnership firm (“the Applicant”), is involved in the buying and selling of Tree Pruners. This product includes an extendable pole with a fitted knife, utilized in agricultural tasks like harvesting crops such as areca, pepper, and coconut, as well as pesticide spraying.

The Applicant has submitted an advance ruling application seeking clarification on whether Tree Pruners falling under HSN Code 8201 6000 are considered agricultural implements manually operated or animal-driven. Consequently, the query pertains to whether Tree Pruners, categorized as an Agricultural Hand Tool, are exempt from GST.

Issue:

Is GST applicable on the supply of Tree Pruners?

Held:

The Karnataka AAR in the matter of KAR ADRG 02/2024 ruled as follows:

• 1.Observed that, Chapter 82 of the Custom Tariff covers “tools. Implements, cutlery, spoons and forks, of base metal, parts thereof of base metal”. Tariff Heading 8201 covers “Agricultural implements manually operated, or animal driven i.e. Hand Tools” and Tariff Heading 8201 6000 covers “Hedge shears, two-handed pruning shears and similar two-handed shears products”.
• 2.Further Observed that, the primary raw material of True Pruners is Aluminum, hence the classification would be based on usage or based on raw material i.e. articles of aluminum.
• 3.Noted that, as per Entry No. 137 of the Goods Rate Exemption Notification, the Goods falling under Tariff Heading 8201 are exempt from levy of GST.
• 4.Opined that, True Pruners used in plucking Areca Nut and Coconut Trees is an agricultural implement and in common parlance can be regarded as tool. Therefore, Tree Pruners would be classified as an agricultural implement/tool used in agriculture under Tariff Heading 8201 6000.
• 5.Held that, True Pruners relating to Agricultural implements manually operated or animal driven would fall within the purview of HSN Code 8201 6000 and are therefore, exempt from levy of GST vide Entry No. 137 of the Goods Rate Exemption Notification.