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2023 (8) TMI 1476 - AAR - GSTLevy of GST - Storage Charges charged from the companies for storage of frozen green peas in the cold storage - Storage Charges comes under NIL GST Tariff under Services by way of Storage or Warehousing of cereals, pulses, fruits and vegetables vide N/N. 04/2022-Central Tax (Rate) dated 13.07.2022 or not - HELD THAT - As per the definition of agricultural produce, agricultural produce is the produce out of cultivation of plants 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. It is opined that various processes involved to change the Raw Green Peas into Frozen Green Peas, changes the basic essence and character of the product and after processing, it does not fall under the agricultural product or vegetable - the spirit of the law is to give exemption for storage of Green Peas in the form as defined at Para 2(d) of the N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 only, and not for Processed Frozen Green Peas. Thus, N/N. 12/2017-Central Tax(Rate) dated 28.06.2017 as amended by N/N. 04/2022-Central Tax (Rate) dated 13.07.2022, does not exempt the services of storage of processed frozen green peas and applicable GST has to be paid by the applicant.
Issues involved:
The application for advance ruling under u/s 97 of the CGST/SGST Act regarding the determination of the liability to pay tax on services. Summary of Judgment: Issue 1: Classification of services for tax liability The applicant sought a ruling on whether storage charges for frozen green peas are taxable under the GST Act. The Authority examined the definition of agricultural produce and concluded that processed frozen green peas do not fall under the exemption for storage of green peas as defined in the relevant notification. Therefore, the storage charges are held to be taxable under the GST Act. Issue 2: Applicability of NIL GST Tariff The applicant inquired whether the storage charges fall under the NIL GST Tariff for services related to storage of cereals, pulses, fruits, and vegetables. The Authority referred to Notification No. 12/2017-Central Tax (Rate) and determined that services by way of storage of processed frozen green peas are not covered under the exemption provided for storage of vegetables. Hence, the storage charges are taxable under the GST Act. Issue 3: Applicability of Notification The applicant questioned the applicability of Notification No. 04/2022-Central Tax (Rate) to their case. The Authority ruled that the notification does not exempt the services of storage of processed frozen green peas, and therefore, the applicable GST must be paid by the applicant. In conclusion, the Authority ruled that the storage charges for frozen green peas are taxable under the GST Act, do not fall under the NIL GST Tariff, and Notification No. 04/2022-Central Tax (Rate) is not applicable to the applicant's case.
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