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2020 (7) TMI 801 - AAR - GSTLevy of GST - hire charges of storage of agriculture produces - storage of exempted goods under the GST Act - Whether the tax is applicable on the same rate or different rates - HELD THAT - On perusal of legal provisions, it is found that loading, unloading, packing, storage or warehousing of agricultural produce is exempted from GST. It is also found that Agricultural produce in the notifications has been defined to mean any produce out of 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, 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 - further, in terms of circular dated 15.11.2017, the storage/warehousing of goods viz pulses, jaggery, etc were taxable but with the introduction of entry 24B in the Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time), storage/warehousing of pulses, jiggery, fruits, nuts vegetables are exempted from GST w.e.f 01.10.2019. The applicant is engaged in rendering services by way of providing storage/warehousing facilities to variety of goods and in terms of legal provisions, the rate of GST for storage/warehouse of goods is 18% - the rate of tax is same for all goods stored.
Issues Involved:
1. Applicability of tax on hire charges for storage of agricultural produce. 2. Applicability of tax on storage of exempted goods under the GST Act. 3. Whether the tax rate is the same or different for various stored goods. Issue-wise Detailed Analysis: 1. Applicability of Tax on Hire Charges for Storage of Agricultural Produce: The applicant sought clarification on whether tax is applicable on the hire charges for storage of agricultural produce. According to Notification No. 11/2017-Central Tax (Rate) and Notification No. 12/2017-Central Tax (Rate), services related to the storage or warehousing of agricultural produce are exempt from GST. The definition of "agricultural produce" includes any produce from the cultivation of plants and rearing of animals (excluding horses) that does not undergo processing altering its essential characteristics but makes it marketable for the primary market. Therefore, the Authority ruled that no tax is applicable on the hire charges for storage of agricultural produce. 2. Applicability of Tax on Storage of Exempted Goods Under the GST Act: The applicant also sought clarification on whether tax is applicable on the storage of exempted goods. The Authority referred to various notifications and amendments, including Notification No. 12/2017-Central Tax (Rate) and its subsequent amendments, which list goods exempted from GST. For instance, storage/warehousing of cereals, pulses, fruits, nuts, vegetables, spices, etc., is exempted from GST effective from 01.10.2019. However, the Authority clarified that the storage of goods not classified as agricultural produce (e.g., curd, desi ghee, dried makhana) is taxable. Therefore, tax is applicable on the storage of all goods, including exempted goods, unless specifically exempted by the notifications. 3. Whether the Tax Rate is the Same or Different for Various Stored Goods: The applicant queried whether the tax rate for storage services is uniform or varies for different goods. The Authority clarified that the rate of GST for storage or warehousing services of goods is 18% (9% CGST + 9% SGST). This rate is applicable uniformly to all taxable goods stored, irrespective of their type. The ruling specified that the same tax rate applies to all goods stored, whether they are agricultural produce or other goods. Conclusion: - No tax is applicable on the hire charges for storage of agricultural produce. - Tax is applicable on the storage of all goods, including exempted goods, unless specifically exempted by notifications. - The rate of tax is the same for all goods stored, set at 18% (9% CGST + 9% SGST).
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