GST Implication on Poultry Farming

The poultry business produces countless work opportunities in the nation and is vital for the public economy. The poultry business is to a great extent absolved by the provisions of the Central Goods and Services Tax Act, 2017. Nonetheless, there are sure issues that need detailed analysis and clarifications. In this article, we will concentrate on the provisions connected with the poultry business and examine something similar in the light of provisions contained in the GST Law.

Sale of Poultry eggs

Poultry Eggs are covered under Chapter 4 of Section I under heading “Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included” of Customs Tariff Act, 1975.

Sale of live Poultry

Offer of live poultry is made in the accompanying circumstances: 

• Sale by hatcher to poultry farmer for the additional raising of Day-Old Chicks. 
• Sale by poultry farmer to the merchant of grill chicken available to be purchased to retailers. 
•  Sale by the trader to retailers for offering to ultimate customers

Notification No. 2/2017-Central Tax (Rate) dated 28-06-2017 states the GST on live poultry which reads as under:

Thus, sale of live poultry in any form is exempt from GST.

Sale of Poultry meat

Oven Chicken is butchered, and its cadaver is handled in its normal shape or is cut into bits of different shapes and sizes. This body is either sold lose or sold by pressing something similar in unit containers. 

A “unit container” signifies a bundle, regardless of whether enormous or little (for instance, tin, can, box, container, jug, sack, or container, drum, barrel, or canister) intended to hold a pre-decided amount or number, which is demonstrated on such bundle. Such compartments are heat safe and contain all components to keep the meat new and palatable.

Hatchery Services

A hatchery service is the essential unit of the poultry business which gives Day Old Bird Chicks by bringing forth the eggs. Hatchery centres might be possessed by poultry farms that after the hatchery is done, place them in farms for additional raising.

 Nonetheless, it is a generally expected practice in the business to send the hatched eggs to a hatchery owner who incubates the eggs in the hatcheries incubator and returns Day Old Bird Chicks. The hatchery owner is paid a predetermined rate for each egg put for hatching.

The service of hatching layer eggs into day old bird chicks can be classified under Sl. No. 54 of Notification No. 12/2017- Central Tax (Rate) dated 28-06-2017 as under:

• “It is a service relating to rearing of all life forms of animals as hatchery services are agricultural operations directly related to production of any agricultural produce i.e. Broiler Chicken and
•  It is a process carried out at an agricultural farm which does not alter the essential characteristics of agricultural produce but makes it only marketable for the primary market. It is just enabling a natural process to occur in an artificial manner.”

Commission Payouts

Commission on sale of Broiler Chicken is paid to sellers. Such commission is exempt from payment of GST under the following section:

“(g) Services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce.”

 Loading/Unloading Charges, Packing & Storage Charges

Loading and unloading charges incurred directly in handling with agricultural produce is also exempt under the following entry:
 “(e) loading, unloading, packing, storage or warehousing of agricultural produce;”

Carrying charges

Transportation of Poultry can be done by any means:

• By a goods transport company or
• By other than goods transport company

Agrarian produce moved by rail or a vessel or a goods transport company has been explicitly exempted by Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017. If the goods transported by Road, for example by some other means then a goods transport company will likewise be excluded from GST. Further, GST on agricultural produce will not be payable on reverse charge premise on transport charges.

GST Implications on Poultry Farming

Poultry Feed is covered by Chapter 23 of Section IV under heading “Residues and waste from the food industries; prepared animal fodder” of Customs Tariff Act, 1975.

Notification No.2/2017-Central Tax (Rate) dated 28-06-2017 reads as follows:

Thus, sale of Poultry Farming is fully exempt from GST.

Final words

From the above examination, it could be reasoned that the poultry farming is all around exempted from GST. In any case, there are sure areas where GST might get applicable and stakeholders need to consider these prior to avoid future disputes.