In a move welcomed by agricultural communities, the Goods and Services Tax (GST) Council has officially clarified vide Circular No. 247/04/2025-GST dated 14.02.2025 that agriculturists supplying dried black pepper are exempt from GST.  This decision provides much-needed relief to farmers and simplifies the tax process for them.

The clarification centers on Section 23(1) of the Central Goods and Services Tax (CGST) Act, which deals with GST registration. According to the Council’s recommendation, agriculturists who cultivate and sell dried black pepper are not required to register under this section. This means they are not liable to pay GST on their sales of dried pepper.

Key Highlights:

  • Exemption from GST: Farmers who sell dried black pepper are not required to pay GST on those sales.
  • No Registration Needed: Agriculturists are exempt from mandatory GST registration under Section 23(1) of the CGST Act for dried pepper sales.
  • Focus on Agriculturists: This exemption specifically targets farmers who grow and process the pepper themselves.

  Clarification Regarding Agriculturists: 

  • The GST Council has clarified that an agriculturist supplying dried pepper from their own cultivation is exempt from GST.
  • Specifically, they are not required to register under Section 23(1) of the CGST Act.
  • This aims to provide relief to farmers and simplify their tax obligations.

  General GST Rate on Pepper: 

  • It’s important to differentiate between agriculturists’ supply and general trade.
  • Pepper of the genus Piper (whether green, white, or black) falls under HS 0904 and generally attracts a 5% GST rate.

This clarification aims to reduce the compliance burden on small-scale farmers and promote agricultural activities. By removing the GST obligation, the Council hopes to ensure that farmers receive fair returns for their produce.

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He has contributed in ICAI, ICSI and MCCI and other various Newsletters. He is also a speaker at various platforms including seminars / webinars.