In re Sardar Mal Cold Storage & Ice Factory (GST AAAR Rajasthan)
The Appellant had submitted a list of various products categorised from Group A to Group C and the process done on those agriculture commodities before they come into cold storage in order to seek advance ruling that whether the goods which comes for storage will come under the definition of agricultural produce or not and whether the supply of Cold Storage services by the appellant firm to various products as mentioned herein below attracts Nil rate of duty or not as per Notification No. 11/2017 Central tax (Rate) dated 28/06/2017.
Held by AAAR
Goods mentioned under Group A fall under the definition of Agriculture Produce and thus supply of Cold storage services, is exempt from the levy of GST
Goods mentioned under Group B to G are not Agriculture Produces and supply of Cold storage services in respect of these, is chargeable to GST.
Also Read AAR Ruling- GST on Cold Storage services related to Agricultural & Other Produce
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, RAJASTHAN
1. M/s Sardar Mai Cold Storage & Ice Factory (hereinafter referred to as ‘Appellant’) had submitted an application seeking an Advance Ruling on the Entry No. 24 of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 which at S. No. 24 (i)(i)(c) provides tax rate as ‘NIL’ for services of loading, unloading, packing, storage or warehousing of agricultural produce as a support services to agriculture, forestry, fishing, animal husbandry. The applicant sought advance ruling over the coverage of definition of support services of loading, unloading, packaging, storage or warehousing of agriculture produce as explained at Explanation (i) (e) given at S.No 24 of the said notification.
2. That the Appellant is the owner of the cold storage house and therefore provides storage and warehousing facilities to variety of produce termed by them as ‘Agricultural produce’. The explanation provided at pt. 4 (vii) of the notification defines agriculture produce as
“agricultural 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 or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary’ market. “And
If any Product falls under the definition of the agriculture produce, then by virtue of S. No 24 of the notification the activity of storage attracts Nil rate of Duty .
3. The Appellant had submitted a list of various products categorised from Group A to Group C and the process done on those agriculture commodities before they come into cold storage in order to seek advance ruling that whether the goods which comes for storage will come under the definition of agricultural produce or not and whether the supply of Cold Storage services by the appellant firm to various products as mentioned herein below attracts Nil rate of duty or not as per Notification No. 11/2017 Central tax (Rate) dated 28/06/2017.
4. The Appellant submitted that none of the products goes through any processing till they come to the cold storage which changes the essential character or marketability of these produce purchased from the farmers/cultivators by the traders. The buyers of the agriculture produce in all the above cases are not carrying out any process leading to change in essential character or enhancing the marketability of produce which is purchased from the cultivators. Thus, what is stored at the cold storage are primarily an agriculture produce and are covered under the definition of the agriculture produce as defined under explanation- 4(vii) of the Notification No. 11/2017 Central tax(Rate) dated 28/06/2017 and Notification No 12/2017 -Central Tax (Rate) dated 28/6/17 (at point 2(d) of the notification) hence attracts NIL rate of duty as per S. No. 24 of the notification no 11/2017 or S. No 54 of the notification no 12/2017.
5. Appellant sought Advance Ruling on the question whether all the goods as listed in their application are covered under the definition of agriculture produce as defined under explanation 4 (vii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and Notification No 12/2017 -Central Tax (Rate) dated 28/6/17 (at point 2(d) of the notification) hence attracts NIL rate of duty as per S. No. 24 of the notification no 11/2017 or S. No 54 of the notification no 12/2017.
6. Authority for Advance Ruling (AAR) vide its Ruling dated 11.06.2018 ruled that Goods mentioned under Group A falls under the definition of Agricultural Produce in terms of the aforesaid notification and so supply of cold storage service in relation to these is exempt from the levy of GST . However if any processing is done on these products as is not usually done by a cultivator or producer at farm level .then these would fall outside the definition of agricultural produce as given in the aforesaid Notification and in that case supply of cold storage service in relation to these would remain chargeable to GST. Goods mentioned under Group B to G are not Agricultural produce in terms of the aforesaid notification and so the supply of cold storage service in relation to these would remain chargeable to GST.
7. Being aggrieved with the Ruling of the AAR. the Appellant has filed appeal before this forum.
CASE FOR THE PARTY
8. That the appellant is the owner of the cold storage house and therefore provides storage and warehousing facilities to variety of agriculture produce. The explanation provided at pt. 4 (vii) of the notification defines agriculture produce as:-
“agricultural 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 or such processing is done as is usually done by a cultivator or producer which docs not alter its essential characteristics but makes it marketable for primary market.”
9. If any Product falls under the definition of the agriculture produce then by virtue of S.No. 24 of the notification the activity of storage attracts NIL rate of Duty.
10. The appellant is hereby discussing the various products and the process done on those agriculture commodities before they come into cold storage.
That at the end of the appellant it is pertinent to decide whether the goods which comes for storage will come under the definition of agricultural produce or not as the decision will have a bearing on the tax rate as storage of agricultural produce attracts Nil Rate of duty.
11. Discussions are made herein below over the products and the process if any applied by the Farmers/Cultivators/ Traders before the products comes for Storage Purpose. The products are grouped as follows:
GROUP-A
