This circular provides clarification on the applicability of GST on seed certification tags issued by State Seed Certification Agencies during the process of seed testing and certification.

The circular explains that seed testing and certification is a multi-stage statutory process carried out under the Seeds Act, 1966, involving activities such as registration of sowing, field inspection, seed processing, sampling, analysis, and tagging. Charges are collected from seed producers at different stages, including fees for issue of seed certification tags.

It is clarified that the supply of seed certification tags by State Seed Certification Agencies to seed producers is not an independent supply of goods but forms an integral part of a composite supply of seed testing and certification services. Such composite supply is provided by Central or State Government agencies and is required under law for ensuring seed quality. Accordingly, the entire activity, including issuance of seed tags, is exempt from GST under Sl. No. 47 of Notification No. 12/2017–Central Tax (Rate), which exempts testing and certification services relating to safety of consumers and the public.

However, where seed certification tags are printed and supplied to the State Government or Seed Certification Agencies by third-party manufacturers or other departments, such supply constitutes a taxable supply of goods. The applicable GST rate and classification will depend on the material used for the tags, such as paper or textile.

This clarification is intended to ensure uniform GST treatment of seed certification activities across States.