Ruling on Storage Services Classification under SAC 99672: Cold Storage Inclusions Clarified

The Authority ruled that storage or warehousing services include cold storage, deep freeze storage, and controlled atmosphere storage services under SAC 99672, unless an exception is provided. Pre-conditioning or pre-cooling services on agriculture produce at the farm gate are not considered as cold storage services, and the benefit of nil rate tax applies if conditions under entry 24(ii) are met. The scope of SAC 9967 for supporting services in transport was clarified to cover specific services related to agriculture produce only. The question on the place of supply of services under IGST Act was not admitted for consideration.

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Issues Involved:
1. Classification of storage or warehousing services under GST.
2. Taxability of pre-conditioning or pre-cooling services.
3. Scope of SAC 9967 relating to supporting services in transport.
4. Place of supply of services under IGST Act (not admitted for consideration).

Detailed Analysis:

1. Classification of Storage or Warehousing Services:

A. Inclusion of Cold Storage, Deep Freeze Storage, and Controlled Atmosphere Storage:
The Authority ruled that warehousing services, covered under SAC 99672, include cold storage, deep freeze storage, and controlled atmosphere storage services unless an exception is provided in the entry.

B. Taxability of Services Related to Agriculture Produce:
Not required to be answered in view of the ruling on A.

C. Definition of Agriculture Produce:
The Authority clarified that the definition of "agriculture produce" includes produce out of cultivation of plants and rearing of animals, where processing is done as usually done by the cultivator or producer, which does not alter its essential characteristics but makes it marketable for the primary market. It is immaterial who performs the processing as long as it meets the criteria.

D. Coverage of Specific Items under Agriculture Produce:
The Authority explained that turmeric whole, turmeric powder, red chili whole, red chili powder, and chili seeds are generally marketed in primary markets in their whole form. Once converted into powdered form, they are sellable in secondary markets.

2. Taxability of Pre-Conditioning or Pre-Cooling Services:

A. Inclusion of Cold Storage, Deep Freeze Storage, and Controlled Atmosphere Storage:
The Authority ruled that pre-conditioning or pre-cooling processes are rendered on agriculture produce at the farm gate before being transported to markets or for storage. These services cannot be regarded as cold storage, deep freeze, or controlled atmosphere storages. The benefit of nil rate on such services is available as long as the conditions and restrictions under entry 24(ii) of the notification are satisfied.

B. Taxability of Services Related to Fruits and Vegetables:
Not required to be answered in view of the ruling on A.

C. Scope of Fruits and Vegetables:
The Authority clarified that pre-conditioning or pre-cooling processes are usually done on fresh harvested fruits and vegetables at the farm gate. The entry covers fresh fruits and vegetables only and does not include dry fruits, cut fruits, frozen fruits, processed fruits, cut vegetables, dried vegetables, or processed vegetables.

3. Scope of SAC 9967 Relating to Supporting Services in Transport:

A. Applicability of Service Codes for Refrigerated Storage and Other Storage Services:
The Authority ruled that the benefit of nil rate is provided only to support services to agriculture specifically mentioned at Sr. No. 24 of the notification. It does not cover the services of transport of agricultural produce. Therefore, the applicable SAC on such services shall be 9967, irrespective of the service being performed in relation to agricultural produce or any other goods.

B. Classification of Cold Storage Services:
Not required to be answered in view of the ruling on A.

4. Place of Supply of Services under IGST Act:
The question regarding the place of supply of services by way of cold storage services was not admitted for consideration as it did not fall under the scope of section 97(2) of the HGST/CGST Act, 2017.

Conclusion:
The Authority provided comprehensive rulings on the classification and taxability of storage, warehousing, pre-conditioning, and pre-cooling services under GST. The rulings clarified the scope of "agriculture produce" and the applicability of nil rate tax benefits, ensuring clear guidance on the treatment of such services under the GST regime.

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