Two years ago, an interesting case was registered in the courts of law regarding the application of GST for cold storage. The court gave a judgment, which set a precedent. So, the cold storage owners should only follow these judgments while leasing the cold storage facilities or lands for agriculture products storage. So, Is a GST number compulsory for cold storage? We have explained the entire case hereunder:
Is A GST Number Compulsory For Cold Storage?
We have explained it concerning a case. Here are the details:
The Case of the Cold Storage Facility and the Application of the GST Number
The decision was reached after M/s Rahil Cold Storage LLP, which handles both the storage and warehousing of various farm commodities, such as rice and pluses, among many others, submitted an application. The applicant mainly leases or rents agricultural machinery, vacant land, or land without a facility essential to its intended use, all exclusively for agricultural use. The company mainly deals with agricultural products.
Applicant Plea - The Problem of the Case
The applicant asked the AAR for a decision on the GST to be billed in accordance with the GST system on the leasehold fees of the cold storage for farm goods, and the amount of tax to be billed for the rental agreement of cold storage to a private company. He further wanted to know whether preservation and maintenance are included or not, and the rate of GST for the storage and/or warehouse of farm commodities and/or seeds.
This blog is also worth reading for you:– How do I claim subsidy for cold storage?
The Decision of the Case
J. Laxminarayana, an Additional Commissioner of State Tax, and B. Raghukiran, a Joint Commissioner of Central Tax, served on the AAR panel that made the decision to impose an 18% Goods and Services Tax just on leasing fees for the cold storage of agriculture products. Additionally, they stated that the exact rate of tax would be applicable to the leasing of cold storage to a privately owned company, whether it included preservation and upkeep, as well as the amount of GST for the storage and/or warehouses of farm commodities and/or seedlings on account of farmers and dealers.
Conclusion
The 18% GST is applicable to the cold storage lease. The Authority of Advance Ruling (AAR) court decided that agricultural products cold storage lease fees will be subject to an 18% Goods and Services Tax (GST).
