26.08.2022: Education and training services provided to the farmers relating to agroforestry exempted from GST: Karnataka AAR

The Karnataka Authority of Advance Ruling (AAR) in the case of M/s Avani Infosoft Private Limited vide Advance Ruling No. KAR ADRG 28/2022 dated 12.08.2022, has ruled that the services of educating and training farmers with regard to agroforestry through scientific research and knowledge do not attract GST.

The applicant, a registered person under GST law, entered into a service contract with M/s Isha Outreach, a public charitable trust, to provide farmers in the Cauvery River Basin with agricultural extension services for tree-based agriculture.

The applicant, under the service contract, will appoint Mara Mitras and other agriculture extension workers (AEW) to provide agricultural extension services, including farmer education and training with regard to agroforestry, by applying scientific research and knowledge. Isha Outreach trains mara mitras, who use a specially curated state-of-the-art information technology platform through which they disseminate technical and scientific information on how to grow timber, horticulture, and sericulture trees on their land.

These Mara Mitras also collects farmers' information, including land details and species-wise details of trees that farmers wish to plant. Hand holding of farmers is done for the pickup of saplings from the nursery. After plantation, proof of plantation and survival of trees is collected through geo-tagged photographs and geo-locations of every tree planted. The applicant also appoints Taluk Managers, District Managers, and Project Managers for the State for the project.

The applicant sought an advance ruling on the issue of whether the services of educating and training farmers provided by the applicant under the service contract between the applicant and M/s Isha Outreach are exempt from GST.

The applicant contended that the definition of “agriculture extension” under para 2(C) of the Notification No.9/2017-Integrated Tax(Rate) states that the services provided to M/s Isha Outreach under the service contract are covered under the “agriculture extension services”. Hence, the services are exempted in terms of entry No.57 of the Notification No.9/2017-Integrated Tax(Rate) dated 28.06.2017.

The AAR observed that the term “agricultural extension” is defined as the application of scientific research and knowledge to agricultural practises through farmer education or training.

Further, the Karnataka AAR has observed that the applicants, through their mara mitras who are Agriculture Extension Workers (AEW), not only educate and train farmers with regard to agroforestry through scientific research and knowledge, but are also involved in hand holding the farmers from recording demand for saplings, picking up the samplings from nurseries to their plantation, and also monitoring post-plantation survival, which is related to agricultural extension activity. Thus, the services of the applicant are covered under agricultural extension services.


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