Presentation by CA.Mukul Sringeri on request of KPFBA

1. GOODS AND
SERVICE TAX
IMPACT OF GST
ON POULTRY
SECTOR

2. WHAT IS POULTRY?
The domesticated fowl collectively,
especially those valued for their meat
and eggs, as chickens, turkeys,
ducks, geese and guinea fowl, etc are
collectively known as poultry
BUSINESS VER
The Poultry industry consists of the
following business verticals:
₪ Feed Mill
₪ Breeder Farm
₪ Hatchery
₪ Contract Farming
₪ Meat Processing

3. IS POULTRY A PART OF
AGRICULTURE ?KVAT Act,2003 - Agriculture with its grammatical variations include
horticulture, the raising of crops, grass or garden produce and
grazing but does not include dairy farming, poultry farming, stock
breeding and mere cutting of wood
Service Tax (Finance Act, 1994) - Agriculture means the cultivation of
plants and rearing of all life-forms of animals, except the rearing of
horses, for food, fibre, fuel, raw material or other similar products.
As per Service tax - Agriculture produce means any produce of agriculture on
which either no further processing is done or such processing is done as is
usually done by a cultivator or producer which does not alter its essential
characteristics but makes it marketable for primary market
As per CGST Act,2017 - Agriculturist means an individual or a HUF
who undertakes cultivation of land by own labour, or by labour of
family, or by servants under personal supervision or supervision of
any family member

4. GST REGISTRATION FOR
POULTRY INDUSTRY
Section 23(1) of CGST Act,2017
states that if any person is
engaged exclusively in the
business of supplying goods or
services or both which are either
wholly exempt or not liable for
GST or an agriculturist to the
extent of cultivation of land is
not liable to take registration
irrespective of his aggregate
turnover.
Sec 2(47) - Exempt Supply
means supply of any goods or
services or both which attracts
nil rate of tax or which may be
wholly exempt from tax under
section 11, or under section 6 of
the Integrated Goods and

5. OUTWARD SUPPLY
List of
Outward
Supplies
in Poultry
Sector
Supply
of
Poultry
Feed
Supply
of Table
Eggs
and
Fertilise
d EggsSupply
of
Poultry
& Parent
Bird
Supply
of
Frozen
meat
Supply
of
excess
producti
on
capacity
Contrac
t
Farming

6. MAJOR POULTRY PRODUCTS
Product Description HSN Chapter Pre GST Post GST
Live Animals Chapter 1 - 0105 Exempt Nil
Frozen Meat Chapter 2 – 0207 5.5% 12%
Non Frozen Meat Chapter 2 – 0207 Exempt Nil
Eggs Chapter 4 – 0407 Exempt Nil
Poultry Feed and Supplements Chapter 23 –
2302/04/05/06/09
Exempt Nil
Vaccines Chapter 30 – 3006 5.5% 5%
Machinery for preparation of
poultry
Chapter 84 - 8438 12.5%+5.5% 18%
Maize Chapter 10 - 1005 Exempt Nil
Soya (Not seed quality) Chapter 12 - 1202 5.5% 5%
Rape seed extract Chapter 15 - 1514 5.5% 5%

8. INPUT AND INPUT SERVICES
Maize, De-oiled cakes of soya,
ground nut and rice bran, Rice
polish, Salt, Rice broken, Cotton
seed, feed supplements.
Most of the raw material for
preparing feed is exempted,
however certain products like Soya
(not seed quality) is taxed at 5%.
1. Labour Charges (Man power supply)
2. Renting of Vacant land with or without a
structure incidental to it’s use
3. Loading, Unloading, Packing, Storage or
warehousing of Eggs, Live birds.
Services relating rearing of all life forms of
animals for food, fibre, fuel, raw material or other
similar products or agricultural produce by way of
the services mentioned are exempted*.

10. INPUT AND INPUT SERVICES
POULTRY
FEED
NOT A PART OF AGRIUCULTURAL
PRODUCE
Loading, unloading, packing,
storage or warehousing
services, if received shall
become liable for GST
Transportation by Rail or Vessel or
GTA* shall also attract GST.(In case
of GTA, GST to be remitted under
RCM, however if the consignment
value is ≤ Rs.750, then no GST).

11. INPUT AND INPUT SERVICES
Transportation of eggs, live birds by
rail or vessel or through a Goods
transport agency.
Transportation of Agricultural Produce
through rail or vessel or through GTA
shall be exempted under GST.

12. INPUT AND INPUT SERVICES
Contract breeder
farming
In case of contract farming, the day
old chick and feed/supplements is
sent to the farmer, he shall be
responsible for rearing the chick. The
broiler bird is taken back by the
supplier(Jobwork).
There is no GST on any intermediary
production process as job work in
relation to cultivation of plants or
rearing of all life forms of animals
3rd Party
Production
In some cases, due to shortage of
production capacity, the raw material
for feed manufacturing is being sent
to Job worker, such job worker
process the raw material and give
back the finished product(Poultry
Feed) to the principal(Manufacturer) .Manufacturing of Poultry feed is not
an intermediate production process in
relation to rearing of all life forms and
hence such job work may attract GST
@ 18%

13. INPUT AND INPUT SERVICES
Inward supply
of services or
goods
From
Unregistered
Person in his
course of
business
The receiver of such
supply is liable to
discharge GST under
Reverse Charge
Mechanism - 9(4) of
CGST Act, 2017
Under the earlier regime, a trader
registered under KVAT Act, 2003
was liable to pay URD tax on
purchases made from unregistered
dealer – Sec 3(2).
Under Services tax only certain
services were under the purview of
RCM.
However under GST, any
registered person receiving inward
supply of services or goods from a
person who does not possess
registration under GST and such
supply is a taxable supply then the
receiver of such supply becomes
liable to discharge GST under
RCM. For eg: Rent on Office space,
Security services for office,

14. COMPOSITION SCHEME U/S
10
Aggregate turnover should
not exceed 75 lakhs in a
year(50 lakhs in case of NE
states)
The registered person should
not make any interstate
outward supplies and not
supply goods through an e
commerce operator.
The registered person should
not be engaged in any supply
of goods which are not
leviable to GST.
He should not be involved in
making of supply of services
This scheme shall be
beneficial to only such dealers
who are either manufacturers
/ traders of animal feed or
sale of frozen meat.
Rate of tax for a manufacturer
would be 1%SGST + 1%CGST
= 2% and for a trader it would
be 0.5%SGST + 0.5% CGST =
1%
No Input tax shall be allowed
as a Credit
Registered person shall
become liable to file return in
GSTR-4 on a quarterly basis.
Annual Return in form GSTR-
9 to be filed within 9 months
from the end of the financial
year.

15. TIME AND VALUE OF SUPPLY
OF GOODS
Time of supply of
GOODS is the
earlier of -
Date of issue of
invoice or
Last date on which
an invoice is to be
issued or
Date of receipt of
payment
Payment date
= 02/08/2017
Issue of
Invoice =
31/07/2017
Time of Supply
= 31/07/2017
Value of Supply shall be the transaction value, which is the price actually paid
or payable for the said supply of goods where the supplier and recipient are
not related and the price is the sole consideration.
In case of related parties, value of supply of goods shall be the open market
value of such goods, however if the market value is not available, value shall
be the value of supply of goods of like kind and quality.
However if the recipient is intending to further supply such goods, then the
value shall be 90% of the price charged by him on such goods to his
unrelated customer

16. TIME AND VALUE OF SUPPLY
OF SERVICE
Value of Supply shall be the transaction value, which is the price actually paid or
payable for the said supply of service where the supplier and recipient are not related
and the price is the sole consideration.
In case related parties, value of supply of service shall be the open market value of
such supply, however if the market value is not available, value shall be the value of
supply of service of like kind and quality.
Date of Issue of Invoice
Within 30 days from the
date of supply of service
Earlier of
Date of Issue of Invoice or
Date of receipt of Payment
Beyond 30 days from the
date of supply of service
Earlier of Date of supply of
service or Date of receipt
of Payment

17. INPUT TAX CREDIT
1. Taxes paid on inward supply
used/intended for use in the course of
business is allowed as Input tax credit.
Credit of taxes paid on capital goods is
also allowed.
2. To claim the input tax credit, the
registered person should have received
the goods/services, possess the tax
invoice, filed his return and subject to
sec 41, the tax on such supply has been
remitted to the government.
3. If the registered person fails to pay the
value of supply and the tax on it to the
supplier within 180 days, the ITC claimed
shall be added to the output tax along
with interest.
4. Input tax related to taxable supplies
can be claimed as credit, any input
utilised for exempted supplies shall not
be allowed as credit
Taxable supplies includes Zero rated
supplies.
Conditions for claiming
Input tax credit

18. MISCELLANEOUS PROVISION –
JOB WORK
1. Registered person, after
intimation, send Inputs & CG
on job work without
payment of Tax
2. He has to receive the
inputs or CG within 1year or
3 years respectively
3. In case of delay of receipt
of Inputs or CG beyond the
time prescribed, the
transaction shall be treated
as taxable supply
4. After Job work, the
registered person may bring
back the goods or sell it
from the Job workers’
premises.
5. Sale from Job workers’
premises is allowed only if it
has been shown as
additional place of business
or the job worker is
registered under GST
6. The responsibility of
keeping proper books of
accounts for Input/CG lie
with the principal

19. MISCELLANEOUS PROVISION
– TAX INVOICE
Name, Address and
GSTIN of Supplier.
Consecutive serial
number(Max 16
digits) & Date of Issue
Name, Address &
GSTIN of Recipient, if
unregistered mention
the State name & code
Place of Supply and
Place of Delivery
HSN Code/ Service
Accounting Code
Description of Goods
and Services &
Quantity of Goods
Total Value, Taxable
Value and Amount of
Tax
Rate, Amount and
Type of Tax
(SGST/UTGST/
CGST/IGST)
Signature/Digital
Signature of the
supplier or authorised
person

20. MISCELLANEOUS PROVISION –
BOOKS OF ACCOUNTS
Accounts of Manufacturing or production, Inward and Outward
Supply of Goods/Services, Stock of Goods, Input tax credit
availed, Output tax payable to be maintained.
Should be kept at the principal place of
business, Accounts of Branch office
should be kept at the branch office.
Books of Accounts can
be maintained in
Electronic Form
If the Turnover exceeds
Rs. 1 Crore – BOA to be
audited by a CA/ CMA and
submitted.
BOA to be retained for 72 months
from the due date of filing of annual
return.
Penalty for non maintenance of BOA – Rs.10,000 or the tax
evaded, whichever is higher.

21. MISCELLANEOUS PROVISION –
PENAL PROVISIONS
Interest on tax
due shall be
computed at a
rate not
exceeding 18%In case of excess
claim of input
tax or undue
reduction of
output tax,
interest at a rate
not exceeding
24% shall be
paid.
Failure to furnish
returns shall
attract a late fee
of Rs.100 for
every defaulting
day subject to a
maximum
amount of
Rs.5,000/-.
Failure to file
Annual Returns
will attract a late
fee of Rs.100 for
every defaulting
day subject to a
maximum
amount of 0.25%
of his turnover in
the state or
union territory.
Penalty of
Rs.10,000 or tax
evaded,
whichever is
higher shall be
levied in cases of
-
supply without
issuing invoice,
details wrongly
mentioned in the
invoice, issuance
of invoice
without
movement of
goods or
services, wrongly
collects tax but
does not remit it
to the

22. Queries raised
Q.1: What are the HSN Codes applicable to Poultry and Food processing industry?
A.1: The HSN applicable for Poultry sector is 0105, 0207, 0407 etc.(Discussed in slide 6 of this
presentation)
Q.2: Whether GST is applicable on Branded Frozen Products, if yes what is rate of GST?
A.2: Yes, GST is applicable on Frozen Meat, the rate is 12%.
Q.3: Whether GST is applicable on Stock Transfers/ Consignments of Goods within the State and
outside the State? Is there any Statutory Forms Applicable?
A.3: GST is not applicable on stock transfer between branches within states having single GST
Registration, In case of Stock transfer between branches of various states, IGST is applicable.
There are no statutory forms like Form F under GST.
Q.4: Can we have one GST Registration Number for Entire Country operations?
A.4: No, Since GST is a destination based tax, separate registration at each state is required.
Q.5: Transition Provision is case of Goods & Services Supplied and issued invoice before 30-06-
2017 and payment made after 1-07-2017, will GST apply in this case?
A.5: In cases where the supply of goods/services and issuing of invoices has taken place prior to
the appointed date and payment is received after the appointed date, Taxes under earlier regime
shall be charged and not GST.

23. Queries raised
Q.6: Customized product Manufacturing. Does that attract GST ? Currently there's no service tax?
A.6: GST is applicable on supply of Goods.
Q.7: Does poultry come under “Animals?
A.7: Yes, Poultry comes within the definition of Animals(Note: Animal has not been defined under
CGST Act,2017).
Q.8: How to deal with the books of Accounts, Control Ledger Accounts?
A.8: Section 35 mandates that every registered person maintain certain Books of Accounts as
stated in that section. Section 36 mandates the registered person to preserve the books of
accounts for a period of 72 months from the due date of filing of Annual Return for the Financial
Year.
Q.9: Do we have to reformat & reprint invoice & bills? If so what is the format for Poultry?
A.9: Section 7 of CGST Act,2017 read with Invoice rules provides the details to be compulsorily
mentioned in the Invoice. There is no defined format provided in the Law, the registered person is
free to follow any format as long as it is in compliance with the requirements given in Section 7
and Invoice Rules.
Q.10: Can you explain Input and output of IGST and CGST, SGST in simple words?
A.10: Local outward supply attracts SGST + CGST and Interstate outward supply attracts IGST.

24. Queries raised
Q.11:If the seller does not file his Outward supply ,can the purchaser be eligible to claim
the Input tax credit?
A.11: The recipient of supply can claim the input tax paid as credit on a provisional basis, however
u/s 42 of CGST Act,2017, if the Supplier does not disclose in his Outward Supply return then the
Input tax allowed shall be added to the Output tax of the recipient.
Q.12:What is the impact of GST on Renewable Energy sources projects like, Solar Power projects
and Biogas power plants?
A.12: Renewable energy devices and spare parts are classified under Chapter 84 and shall attract
GST @5%.
Q.13:Can you explain even after implementation of GST upto which date https://vat.kar.nic.in
works. if yes up to which date the same can work?
A.13: Clarification is yet to be provided by the Commercial Tax Department.

25. QUERIES TO BE CLARIFIED
BY THE DEPARTMENT
Q1. Is Poultry included in the term Animal?
Q2. Is poultry farming part of agriculture?
Q3. Is nil and zero rate same or is nil and exempt goods same?
Q4. Can exemption be claimed with respect to intermediary job work
being undertaken as contract farming as such exemption is available
for rearing of all life forms of animals?
Q5. Contract labour being used in poultry farms also be exempted
as supply of farm labour is exempt?
Q5. Do poultry products a part of agricultural produce?

26. THANK YOU
Contact Details –
CA.Mukul Sringeri
📞: 9945397780
📧: sringerimukul.2@gmail.com
“It is well known that a doctor treats the diseases but few people know that a CA
looks after the health of the society”
– PM.Narendra Modi
*participants are requested to approach their GST Consultant before taking any
action on the basis of this presentation.