Taxability of Milk Chilling & Storage Charges

[Sanjeev Agrawal]

As per Notification No. 12/2017 dated 28 June, 2017

Agriculture produce means ' Any produce out of cultivation of plants and rearing of all life forms of animals except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done of such processing is done as is usually done by a cultivator or producer which does not alter its essential charateristics but makes it marketable for primary market.'

As per S. no. 54 Any services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agriculture produce by way of:

(e) loading, unloading, packing, storage or warehousing of agriculture produce. is exempt from GST.

As per above definition of Agriculture produce milk is covered under the definition of agriculture produce as it is a produce out of rearing of animals. Further, chilling of 'milk' is the mandatory requirement for storage/warehousing of milk to maintain the essential charateristics.

Whether it should be covered under the above mentioned serial no for exemption.

AI Summary

Milk Chilling Services Likely Exempt from GST as 'Agricultural Produce' Under Notification No. 12/2017 A discussion on a forum addressed the taxability of milk chilling and storage charges under GST. The query centered on whether these services qualify as exempt under the definition of 'agricultural produce' per Notification No. 12/2017. Replies indicated that chilling milk does not constitute manufacturing, thus preserving the milk's essential characteristics and potentially qualifying for exemption. Case law was cited, including decisions by CESTAT Delhi and Jaipur favoring the assessee, although the department has appealed to the Supreme Court. The consensus among respondents was that chilling services are likely exempt under current GST definitions and precedents.