Applicant:-M/s Karnataka Food & Civil Supplies
The Applicant is engaged in the business of distributing Rice, wheat, palm oil, Toor dal, and salt etc. under the Public Distribution System by the Government of Karnataka. The applicant stated that they are hiring a Godown of central warehousing corporation for consideration as storage charges and using for storage of commodities which comprise both exempt as well as taxable.
Applicant sought ruling on:
Whether GST is payable on the storage charges???
AAR OBSERVATIONS AND FINDINGS ( Karnataka ) DATED 30.09.2019
- The applicant shall make their own arrangements for comprehensive insurance of stocks stored and the CWC shall not be responsible to make good any losses or damages to goods.
- The applicant is required to take all clearances/permissions for storing the goods from the concerned authorities.
- The applicant is allowed to maintain their own stock accounting for the goods stored in the godown on dedicated warehousing basis. The applicant is also allowed to deploy their own security personnel for storage space allotted subject to overall discipline and control of the warehouse manager CWC.
- The CWC, based on the request of the applicant would consider providing separate water, telephone and Electricity connection wherever feasible. Cost of installation shall be borne by the applicant and the payment for all utilities will be made by the applicant with intimation and necessary proof to CWC.
- The applicant is entitled to remove its goods, fittings, fixtures etc. at their own cost and hand over the godown to CWC after restoring it in the same condition in which it existed at the time of commencement of agreement. The applicant is forbidden to sublet the premises to any third party.
- AAR held that from all the point above, the fact that the services provided by the CWC to the applicant are actually a renting of immovable property and not storage service of goods. The said service is covered under SAC 997212 and is liable to 18% under entry no. 16 of Notification No. 11/2017 dated 28.06.2017.
Source:- M/s Karnataka Food & Civil Supplies Advance Ruling No. KAR ADRG 112/2019 Date:- 30.09.2019
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