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of <h1>Cold storage operations for agricultural products classified under SAC 9986 support services, exemption under notification 12/2017 entry 54(e) applies regardless of recipient</h1> <h3>IN RE: M/s SSSVK COLD STORAGE PVT. LTD</h3> The AAR-AP ruled that cold storage operations for agricultural products fall under SAC 9986 (support services to agriculture) rather than SAC 9967 ... Classification of goods and/or services or both - cold storage operations for agricultural products - rate of tax - Whether the storage of Agriculture produce falls under Service Account Code (SAC) 9986/9 or 996721 or some other SAC? - Whether the services falls under SAC 9986/9 the exemption under notification no 12/2017 C7R dated 28.06.2017 under entry no 54(e) is applicable to both farmers and traders? - Documents required to be taken by cold storage operator for availing exemption benefit. Held that:- Heading 9967 deals with support services in transportation. Whereas, heading 9986 deals with support services to agriculture, forestry, fishing, animal husbandry. Accordingly, there is no hesitation to rule out the heading 9967 - As seen from the plain reading of the entry 54 and 55, it is evident that the services provided in activity of cultivation, from the initial stages up to the marketable stage, subject to conditions was 4nil rated - as long as the commodities fall under the purview and ambit of' agricultural produce' as referred in the said notification read with the explanation in the circular referred attracts 'nil' rate of tax Applicability of the exemption under N/N. 12/2017(CGST-Rate) - Held that:- The notification is service specific and not person specific. Hence the entry no 54(e) is equally applicable for agricultural produce of both the farmer as well as the trader. Documents to be maintained for claiming such exemption - Held that:- It does not fall under the purview of advance ruling authority as per the provisions of the CGST/AP GSTAct'2017. Ruling:- The storage and warehousing of Agriculture produce falls under Service Account Code (SAC) 9986 and not under 9967 - The exemption under N/N. 12/2017 Central Tax (Rate) dated 28.06.2017 under entry no 54(e) is applicable for agricultural produce of both farmers and traders. 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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