Shanti Prime Publication Pvt. Ltd.
Advance Ruling — Classification of goods — The applicant is engaged in the purchase and cutting and removal of rubber trees from the plantations of certain public sector undertakings owned by the Government of Kerala and also from private individuals in Kerala. The applicant contends that the tax liability of timber and firewood/fuel wood is explained under HSN code 4401 and there is no direction to collect GST for standing trees of rubber trees which fall under HSN code 06. But, the State Farming Corporation is demanding 18% on live rubber trees. The tax liability of GST coming to effect only when the standing trees are cut down and separated into timber/wood and fuel wood/fire wood as the case may be. Authority for Advance Ruling, Kerala held that:—As per the terms and conditions in the e-tender of State Farming Corporation, the contractor should cut and remove the trees from the estate. Further, no other trees or fuel wood in the estate are allowed to be cut down or removed. As per the definition of goods in Section 2(52) of CGST Act, 2017, "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops. Grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of suppIy . In this case, under the contract of supply, growing crops - i.e., rubber trees are agreed to be severed before supply and hence, comes under the definition of 'goods'. Thus, standing rubber trees no longer remain as such. Therefore, it can only be treated as 'wood in rough form'. It is hereby clarified that rate of tax on rubber wood in the aforesaid transaction is 18% under the HSN 4403. 51 TUD 16 (AAR-KER)