18% GST Levy on Supervising & Transportation Agriculture Produce Relating FCI

It has been held by The Karnataka Authority of Advance Ruling (AAR) that 18% GST shall be levied on Handling, Supervising, and Transportation “ of agricultural produce that belongs to the Food Corporation of India.

Karnataka State Warehousing Corporation, the applicant, submitted to the aforesaid Honourable Court that they were established by the State Government of Karnataka and are the undertaking of the Karnataka State Government set up as per Agricultural Produce (Development and Warehousing Corporations) Act 1956. However, the aforesaid act was later repealed by the erstwhile Warehousing Corporation Act, 1962. And furthermore, the Central Warehousing Corporation and the Government of Karnataka hold an equal number of shares in it (50:50).

Applicant, Karnataka State Warehousing Corporation

1. Acquiring and/or warehouses building and/or building godowns within the State of Karnataka.
2. Facilitating loading and unloading of agricultural produce, manures, seeds, fertilizers, for handling & transport and so on, to and from various railheads to godowns of corporations; and supervise all aforesaid activities that are being carried out by handling & Transport contractors (H&T Contractors).
3. Making arrangements for disinfestation services for the benefit and on behalf of farmers, public libraries, government offices, and so on.
4. Running Warehouses in the State of Karnataka for the storage of Agricultural seeds, Produce, Fertilizers, manures, Agriculture implements, and other commodities that are notified.
5. At last, leasing/renting out space per square feet or on any other criteria to other agencies/corporations for storing of food grains, fertilizers, and oil. branded goods and so on.

The applicant, Karnataka State Warehousing Corporation, was seeking advance ruling whether it is subject to CGST/KSGST Acts, 2017 and if yes, what is the rate of applicable tax and the SAC/HSN code applicable.

The Coram of Mashood Ur Rehman Farooqui and Dr. M.P.Ravi Prasad held that the services of the applicant come within the domain of SAC 9997 GST rate of 18% is applicable on it in terms of “Sl. No.35 of the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017.”