In re M/s. Nutan warehousing Company Pvt. Ltd. (GST AAAR Maharashtra)
Products stored in the warehouse of the appellant are not the agricultural produce, we come to the question asked in the advance ruling application filed by the them i.e. Whether the supply of warehouse services used for packing & storage of tea, under above mentioned facts & circumstances was/is exempted vide Serial No 54(e) of Notification No. 12/2017- Central tax (rate) or otherwise. The answer to this question will be negative as the said exemption granted vide the above notification is provided to the storage and warehousing services when provided in relation to the agricultural produce.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, MAHARASHTRA
(under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by Nutan Warehousing Company Pvt Ltd (herein after referred to as the “Appellant”) against the Advance Ruling No. GST-ARA-30/2017-18/B-38 dated 23.05.2018
BRIEF FACTS OF THE CASE
A. M/s Nutan Warehousing Company Pvt Ltd, 1379, Krishi Bhawan, Bhawani Peth, Pune, Maharashtra- 411002 (hereinafter referred to as appellant) is a company registered under GST vide registration No. 27AAACN7084L2ZZ.
B. Appellant company was formed for the following main objective-
a) To carry out the business of warehousing, cold storage and refrigeration in all its branches and activities and sphere.
b) To carry out the business of storage of fertilizers, insecticides, quality seeds, agricultural and horticultural equipment, tools and machineries.
c) To carry out the business of quality seeds and develop quality seeds, acquire suitable lands and carry on agriculture.
d) To produce material and fertilisers and insecticides and to acquire agency in the above lines and act as commission agents.
e) To act as clearing and godowns for proper and safe storing of valuable agricultural and horticultural produce and to provide goods and services of all kinds in connection therewith.
f) To provide godowns and warehousing facilities for goods of all descriptions of agricultural and allied products.
g) —-
C. Appellant had been granted license for carrying out business of warehousing under the Bombay Warehousing Act, 1959. Accordingly, Appellant had constructed Warehouses at various places including warehouse at Fursungi, Pune (hereinafter referred to as the said warehouse). The Appellant had given on rent the said warehouse to M/s Unilever India Exports Ltd (hereinafter referred to as Unilever) on specific compensation allowed under Bombay Warehousing Act.
D. M/s Unilever India Exports Limited (herein after referred to as “Unilever”) procures tea of various qualities in bulk either from public tea auctions or directly from manufacturers of tea in 50 Kg bags and stores them in the said warehouse. Procured tea leaves normally undergo following standard processes prior to procurement-
“Tea leaves are plucked from the tea plants and the green leaves, plucked from the plants are not fit for the human consumption, it cannot be sold in the open market for human consumption. The raw tea leaves are withered by exposure in the shadow of the sun or by heating in trays until pliable. Thereafter the leaves are rolled by hand or machine in order to break the leaf cells and liberate the juices and enzymes. Finally, the leaves are completely dried either by further exposure to the sun, over fires, or in a current of hot air and then the tea leaves are fermented in baskets, glasses and in clothes. Thereafter the leaves were subjected to grading with sieves of various sizes. The said leaves are finally roasted with charcoal for obtaining suitable flavour and colour. Thereafter the said tea is packed in the bulk packs.
The processing of the tea makes it marketable by minimal process and they are made fit for human consumption. All the above processes are necessary for the purpose of saving the tea leaves from perishing. In case the above process is not carried out immediately, the entire tea leaves would be perished. The process, as indicated above, at no point of time, crossed that limit and robbed the tea leaves of their character of being and continuing as such substantially. “
The process undertaken on green leaves consists of only above processes and not beyond them.
E. The said procurement was undertaken during season. As per the specific order, M/s Unilever undertook blending and packing of the same at the said warehouse. After packing, tea was exported to overseas countries.
F. Appellant is of strong view that the tea, procured in bulk, either from public tea auctions or directly from manufacturers of tea is an agricultural produce as defined in clause 2(d) of the Notification No. 12/2017-CT (Rate) dated 28.6.2017 because, it was not losing the essential characteristics of tea.
G. Appellant claims that the storage and warehousing of tea is exempted vide Serial No 54(e) of Notification No. 12/2017- Central tax (rate). The said entry is reproduced as under-
