M/S SSSVK COLD STORAGE PVT. LTD.

The Applicant  are engaged in cold storage operations. It extends his services by storing various processed and unprocessed agricultural produce pertains to both the farmers and traders.

The Applicant has sought Advance Ruling on following issues:
(a) Whether the storage of agriculture produce falls under SAC 998619 or 996721 or some other SAC and determination of rate of tax on storage of agricultural produce?
(b) Whether the services falls under SAC 998619 and the exemption under Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 under entry no. 54(e) is applicable to both farmers & traders?
(c) If exemption under Notification No. 12/2017 Central Tax (Rate) is applicable exclusively for farmers, then what are the documents required to be taken by the cold storage operator for availing exemption benefit.

The Applicant submitted that service under SAC 998619 is more opt i.e., storing of agricultural produce under entry number 54(e) of Notification no 12/2017 Central Tax (Rate), and contended that entry under SAC 996721 is generic in nature. Also the entry doesn’t have any specific reference to specific class of persons but to specific class of services, accordingly the benefit of the exemption should be extended for both the farmers and the traders.

Heading 9967 deals with support services in transportation. Whereas, heading 9986 deals with support services to agriculture, forestry, fishing, animal husbandry. Accordingly 9967 is not applicable. From entry 54 and 55 it is evident that the services provided in activity of cultivation, from the initial stages up to the marketable stage, subject to conditions was ‘nil rated. Among different support services for the cultivation or the agricultural operations, the storage of and warehousing is also mentioned. However ‘nil’ rate is applicable subject to the condition that the support service is extended to the ‘agricultural produce’ only.

So as long as the commodities fall under ambit of ‘agricultural produce’ as referred in the notification read with the explanation in the circular attracts ‘nil’ rate of tax. Further the notification is service specific and not person specific. Hence the entry no 54(e) is equally applicable for agricultural produce of both the farmer as well as the trader.

However, question in respect of documents to be maintained for claiming such exemption does not fall under the purview of advance ruling authority as per the provisions of the CGST/APGST Act’ 2017.

Crux: (a)The storage and warehousing of Agriculture produce falls under Service Account Code (SAC) 9986 and not under 9967.
(b) The exemption under notification no 12/2017 Central Tax (Rate) dated 28.06.2017 under entry no 54(e) is applicable for agricultural produce of both farmers and traders.
(c) The question relating to documents to be maintained for claiming exemption does not within the purview of Advance ruling authority as per the provisions of CGST Act.