Sum received by cold storage facility for storing Eggs is not liable for GST [AAR]

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Studycafe | Mar 24, 2019 | Views 1685289

Sum received by cold storage facility for storing Eggs is not liable for GST [AAR]

Sum received by cold storage facility for storing Eggs is not liable for GST [AAR]

Ruling by AUTHORITY FOR ADVANCE RULINGS, RAJASTHAN in matter of Shubhlaxmi Cold Storage & Ice Factory (P.) Ltd. : The charges received by the Cold Storage Factory for providing service of storing of “fresh eggs” in shell on which no further processing is done, which are produce of rearing of animals/poultry farming, are exempted from payment of GST in terms of entry No. 24 of Notification No. 11/2017-CT (Rate) and entry S. No. 54 of Notification No. 12/2017-CT (Rate) dated 28.06.2016.

Sum received by cold storage facility for storing Eggs is not liable for GST [AAR]

The Extract of Ruling is given below for reference :

4.1. We have gone through the content of the Advance Ruling Application filed by applicant, submission made at the time of personal hearing and comments of the jurisdictional officer and find that the applicant has facility of cold storage house and therefore is supplier services of storage and warehousing to variety of agriculture produce.

4.2. The Applicant has sought Advance Ruling on applicability of Entry No. 24 of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and Entry No. 54 of the Notification No. 12/2017 Central tax (Rate) dated 28/06/2017. The applicant has sought advance ruling on matter whether charges received by the cold storage for providing service of storing of eggs, which is produce of rearing of animals/poultry farming in cold storage, is exempted from payment of GST.

4.3. Entry No. 54 of Notification No. 12/2017-CTR(ate) dated 28.06.2017 exempts “Services relating to cultivation of plants and rearing of all life forms of animal,sexcept the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of

(a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing plant protection or testing;

(b) supply of farm labour;

(c) processes carried out at an agricultural farm including tending pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;

(e) loading, unloading packing, storage or warehousing of agricultural produce; m agricultural extension services;

(g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce;

(h) services by way of fumigation in a warehouse of agricultural produce”

For the purpose of above notification ‘agriculture produce’ has been defined in clause (d) of para 2 of Notification No. 12/2018 ibid, which is as under:

“(d) ‘agricultural Produce’ means any produce out of cultivation of plants and rearing of all life forms of animal, 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.”

Eggs are produced out of rearing of chicken (Poultry Farming) for food and as per definition of Agricultural Produce, any produce out of rearing of all life forms of animal, 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.” Thus Fresh Eggs in shell on which no further processing is done are covered under definition of “agricultural produce.”

4.5. The Principal Bench of CESTAT, New Delhi in matter of M/s. Shriji Ice Factory versus Commissioner Of Central Excise, Jaipur-II reported in 2017 (52) S.T.R. 446 (Tri. Del) has also held that “Storage and Warehousing services- Activity of providing cold storage facility for milk which is an ‘Agricultural Produce’ not leviable to Service Tax -Section 65(102) of Finance Act, 1994.”

5. Based on above facts along with provision of law, we pronounce the ruling is as follows:

RULING

The charges received by the applicant for providing service of storing of “fresh eggs” in shell on which no further processing is done, which are produce of rearing of animals/poultry farming, are exempted from payment of GST in terms of entry No. 24 of Notification No. 11/2017-CT (Rate)and entry S. No. 54 of Notification No. 12/2017-CT (Rate) dated 28.06.2016.

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