Rack Installation with respect to Agriculture Produce

[KUMAR Narasimhan]

Dear Sir / Madam,

Manufacturing company has doing Rack Installation for storage of Agriculture Produce is exempted or Taxable?

In general they charge 18% to their customers, but though this process have been doing for Agriculture Produced by Govt company they are denying to pay the GST on the above.

Please clarify, Is it Taxable or Exempted? if it is exempt from Tax, what documents to be collected from them to Justify this is exempted sales.

[Shilpi Jain]

Exemption is available for pure services provided to government entity or government authority in case it is in relation to activity is mentioned under article 243 G or 243 w of the constitution

[Shilpi Jain]

Please also clarify whether it is supply of the racks or it is a service of installation of the rack which is provided by the manufacturer. if it is supply of goods I doubt if there could be any examination

[KASTURI SETHI]

In my view, installation of racks for storage of agriculture produce is covered under 'support services to agriculture produce' and hence attracts NIL rate of tax. See Notification 11/17-CT(R) dated 28.6.17 as amended (serial no.24 of the notification refers.).HSN 9986.

[KUMAR Narasimhan]

Dear Sir / Mam,

Thank you for your clarification.

Rack Installation comprises of supply of Goods and Services for the Agricultural Produce

[Shilpi Jain]

So if it is a transaction where supply of racks is principal supply and installation is incidental then it would be a supply of goods and exemption will not be applicable.

[KUMAR Narasimhan]

Dear Mam,

Thank you for clarifying on the above topic

AI Summary

Supply classification: installation as service can be nil-rated; where goods are principal supply, it's taxable.
GST treatment depends on classification: installation treated as a support service to agricultural produce is nil-rated; if the racks are the principal supply and installation is incidental, the transaction is treated as supply of goods and the agricultural support-service exemption does not apply.