TN AAR: GST Exemption on Rental Income for Storing Agricultural Products

For the case of Shri R.Gopalsamy, the Authority of Advance Ruling (AAR Tamilnadu) directed that the rent obtained via warehouse for storing the Agricultural Produce Exempt from GST.

The Question and Ruling are as follows:

1. Is the rental income from leasing a warehouse to store agricultural produce considered a supply of services under Section 7 of the Central Goods and Services Tax Act, 2017?
2. When the aforesaid activity is deemed as supply of service, then whether the same 1S classifiable as “loading, unloading packing, storage or warehousing of agricultural produce, with ‘NlL’ GST Rate under SL No. 54(e) of SAC 9985 of the Notification- 11/2017- C.T. (Rate) dated 28th June 2017?
3. GST Rate and SAC Code applicable (if the answer to point no.2 above is “No”)

Tamil Nadu GST AAR Ruling

• Rental Income that the applicant receives from Renting a Warehouse to store Agricultural Produce is a consideration for supply and the activity is covered under the meaning of supply of services in terms of Section 7 of the Central Goods and Services Tax Act, 2017.
• Renting a Warehouse to store Agricultural Produce is deemed as a supply of service, and the is not classifiable as “loading, unloading packing, storage or warehousing of agricultural produce, with ‘Nil’ GST Rate under SL No. 54(e) of SAC 9985 of the Notification-11/2017 – C. T. (Rate) dated 28th June 201 7.
• Renting a Warehouse to store Agricultural Produce is covered under the entry ‘Rental or leasing services involving own or leased non-residential property’ classifiable under SAC 997212 and it attracts GST @ 18% vide entry SL No.16 (iii) of Notification No.11/2017 Central Tax Rate dated 28.06.2017.