GST Update

 Desk of CA. Praveen Sharma – 956 Series (CAPS) 

In a recent ruling, Gujarat AAR examined the GST classification of semen sorting services provided by Jiva Sciences Private Limited. The company is engaged in scientifically separating X and Y chromosome sperm cells from bovine semen and returning the processed material to semen stations for further use in breeding.

The key issue was whether such services qualify as exempt support services to animal husbandry or taxable technical services. The applicant argued that the activity falls under SAC 9986, which covers agricultural and animal husbandry support services, thereby eligible for GST exemption. However, the department contended that the process is highly technical and should be classified under professional services, making it taxable.

The Authority observed that semen sorting is an intermediate process directly linked to livestock breeding and dairy development. It further noted that the activity involves processing goods belonging to another registered person, thereby qualifying as job work under Section 2(68) of the CGST Act.

Based on this analysis, Gujarat AAR held that semen sorting services fall under support services to animal husbandry and are exempt from GST under relevant notifications.

This ruling provides clarity for similar scientific processes in agriculture, reinforcing that even advanced technologies can qualify for exemption if they directly support primary agricultural activities.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS