Cold storage operations for agricultural products classified under SAC 9986 support services, exemption under notification 12/2017 entry 54(e) applies regardless of recipient

The AAR-AP ruled that cold storage operations for agricultural products fall under SAC 9986 (support services to agriculture) rather than SAC 9967 (support services in transportation). The authority determined that exemption under notification 12/2017 entry 54(e) applies to agricultural produce storage for both farmers and traders, as the notification is service-specific rather than person-specific. Services related to agricultural cultivation from initial stages to marketable stage attract nil rate of tax when commodities qualify as agricultural produce under the notification. The AAR declined to rule on documentation requirements for exemption, stating it falls outside their jurisdiction under CGST/AP GST Act 2017.

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Issues: Classification of goods/services, applicability of notification, determination of tax liability, exemption eligibility for farmers and traders, required documents for exemption.

Classification of goods/services:
The applicant, engaged in cold storage operations for agricultural produce, sought an advance ruling on the classification of goods/services. The authority analyzed the relevant entries under SAC 9986 and 9967, ruling out 9967 as it pertains to support services in transportation. The ruling clarified that storage and warehousing of agricultural produce fall under SAC 9986, which includes services related to agriculture, forestry, fishing, and animal husbandry.

Applicability of notification:
Regarding the applicability of notification no. 12/2017 Central Tax (Rate), the authority determined that the exemption under entry no. 54(e) is service-specific and not person-specific. Consequently, the exemption is deemed applicable to agricultural produce for both farmers and traders alike. The ruling emphasized that as long as the commodities qualify as agricultural produce as defined in the notification, they attract a nil rate of tax.

Determination of tax liability:
The applicant also inquired about the tax rates applicable to specific commodities. The authority clarified that commodities falling under the definition of agricultural produce are subject to a nil rate of tax. The ruling highlighted that the exemption under the notification is not restricted to a particular class of persons, extending to both farmers and traders engaging in the storage of agricultural produce.

Exemption eligibility for farmers and traders:
In response to the applicant's query about the eligibility for exemption under the notification, the ruling confirmed that entry no. 54(e) applies to agricultural produce of both farmers and traders. The authority's decision emphasized the service-specific nature of the exemption, ensuring its equal applicability to all entities involved in the storage of agricultural produce.

Required documents for exemption:
The applicant also sought guidance on the documents necessary to claim the exemption benefit. However, the authority concluded that the maintenance of such documents does not fall under the purview of the advance ruling authority as per the provisions of the CGST/AP GST Act'2017. Therefore, the ruling did not provide specific requirements for the documents needed to avail the exemption benefit.

In conclusion, the authority ruled that the storage and warehousing of agricultural produce fall under SAC 9986, the exemption under notification no. 12/2017 Central Tax (Rate) applies to both farmers and traders, and the maintenance of documents for exemption does not fall under the advance ruling authority's jurisdiction.

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