Facts -

• The Applicant, Venkateshwara Hatcheries Pvt. Ltd. (VHPL), provides laboratory testing and analysis (feed, water, etc.) related to poultry brooding, growing, and laying, to Venkateshwara Research & Breeding Farm Ltd. (VRBFL) and Venco.
• The applicant is receiving commission from the clients @10% of the value of sale of birds for the selling arrangement, 3% of the value of sale of birds for the Veterinary Services and 7% of the value of sale of birds for the Laboratory Testing services provided by them to the clients. They are currently classifying the commission received on sale under Heading 9961, Veterinary services under Heading 99835 and technical testing an analysis services under Heading 998346 and paying 18% tax on the services supplied by them.

Issue -

• Whether lab testing and analysis service provided by VHPL classified under SAC 9986 and the commission  for such services exempt from GST under Entry No. 54 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017?

Order -

• The AAR observed that in the instant case, the applicant is working as a commission agent for sale of the chicks on behalf of the client. Such services are not for sale of any agricultural produce but in fact such services are for sale of livestock themselves for the purpose of breeding. Therefore, the services provided by the applicant in the instant case is not sale or support services for any agricultural produce but a sale in the general wholesale trade. Therefore, the said services are appropriately classifiable under Heading 996111. Consequently, the provisions of Sl.no.54 of Notification No.12/2017 Central Tax (Rate) dated 28.6.2017 would not be applicable to the said services provided by the applicant.
• The applicant employ specialized veterinary doctors at various locations to provide services to their clients. Such services includes diagnostic, preventive healthcare and nutrition advice to the live stock. Such services are therefore covered under the exemption provided by a veterinary clinic to livestock. Therefore, the applicant is entitled to avail the benefit of Sr.No.46 of the Notification No.12/2017 Central Tax (Rate) dated 28.6.2017.
• With regard to laboratory analysis and testing services, it was observed that the applicant are more akin to technical testing and analysis services provided by them from their laboratory. Therefore, the said services are appropriately classifiable under heading 998346. Since the services are appropriately classifiable under Heading 998346, the benefit of exemption under S.No.54 of the Notification No.12/2017 Central Tax (Rate) dated 28.6.2017, which is available only to services classified under Heading 9986 would not be available to the applicant.