Tax Exemption for Agricultural Storage Services Upheld by Authority

The Authority ruled that no tax is applicable on the hire charges for storage of agricultural produce. However, tax is applicable on the storage of all goods, including exempted goods, unless specifically exempted by notifications. The tax rate for storage services is uniform at 18% (9% CGST + 9% SGST) for all taxable goods stored, irrespective of their type.

---

---

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).

---