Query 1
Scope of exemption about Storage and Warehousing of fruits under GST
The facts are that the querist, amongst others, involved in warehousing of wet dates in his warehouse.
Till 30-9-2019, querist was paying GST on warehousing charges collected from the customers.
On 30-9-2019, the Government has issued Notification No. 21/2019 Central Tax – (Rate). The relevant part of said notification is as under:
“[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II,
SECTION 3, SUB-SECTION (i)]
Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 21 /2019- Central Tax (Rate)
New Delhi, the 30th September, 2019
G.S.R……(E).– In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 691(E), dated the 28th June, 2017, namely:–
In the said notification,–
(i) in the Table, —
(a) against serial number 7, in the entry in column (3), for the words and brackets, “twenty lakh rupees (ten lakh rupees in case of a special category state) in the preceding financial year”, the following words, brackets and figures shall be substituted, namely, –
“such amount in the preceding financial year as makes it eligible for exemption from registration under the Central Goods and Services Tax Act, 2017 (12 of 2017)”;
(b) after serial number 9A and the entries relating thereto, the following shall be inserted namely:—
|
(1) |
(2) |
(3) |
(4) |
(5) |
|
“9AA |
Chapter 99 |
Services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-17 Women’s World Cup 2020 to be hosted in India. |
NIL |
Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women’s World Cup 2020.”; |
(c) against serial number 14, in the entry in column (3), after the word “below”, the words “or equal to” shall be inserted;
(d) against serial number 19A, in the entry in column (5), for the figures “2019”, the figures “2020” shall be substituted;
(e) against serial number 19B, in the entry in column (5), for the figures “2019”, the figures “2020” shall be substituted;
(f) after serial number 24A and the entries relating thereto, the following serial number and entries relating thereto shall be inserted, namely:—
|
(1) |
(2) |
(3) |
(4) |
(5) |
|
“24B |
Heading 9967 or Heading 9985 |
Services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea. |
NIL |
NIL”, |
2. This notification shall come into force with effect from the 1st day of October, 2019.
[F. No. 354/136/2019 -TRU]
(Ruchi Bisht)
Under Secretary to the Government of India
Note:- The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 12/2017 – Central Tax (Rate), dated the 28th June, 2017, vide number G.S.R. 691 (E), dated the 28th June, 2017 and was last amended by notification No. 13/2019 – Central Tax (Rate), dated the 31st July, 2019 vide number G.S.R. 540(E), dated the 31st July, 2019.”
In light of above notification, querist is of view that the warehousing charges related to wet dates are getting exempted and no GST is required to be charged by querist.
The querist has sought opinion about correctness of above understanding.
Reply:
I have gone through the above notification. Earlier (i.e. prior to 1-10-2019) there was Notification no. 11/2017- Central Tax (Rate) and others by which warehouse charges for agricultural produces were given exemption.
There was ambiguity as to whether warehouse charges for wet dates will be exempt as agriculture produce. The Government has issued clarification vide circular no. 16/2017-GST dated 15-11-2017. However, there was no specific mention of wet dates and hence some of the suppliers continued to charge GST to their customers.
The notification dated 30-9-2019 appears to be specifically issued to clear ambiguity about above matter. The earlier notification referred to agricultural produce and a doubt was lurking whether wet dates will fall in the said category or not.
However, now the above notification dated 30-9-2019 is in reference to specific category, like warehousing of cereals, pulses, fruits etc.. So, if it can be said that the warehouse charges are for fruits, the said warehouse charges will be exempt under above notification.
The nature of wet dates is required to be seen. As informed, it is covered as agricultural produce as it is sold in same form without any processing.
In dictionaries and in common parlance also wet dates are understood as ‘fruits”.
The definition in following dictionaries can be referred for sake of indication.
In freedictionary.com
Date palm (redirected form Date (fruit)
also found in : Thesaurus, Encyclopedia.
Thesaurus Antonyms related words Synonyms Legend:
Switch to new thesaurus
Noun 1. date palm –
tall tropical feather palm tree native to Syria bearing sweet edible fruit
Phoenix dactylifera
date – sweet edible fruit of the date palm with a single long woody seed.”
In dictionary.com
“Fruit[ froot ]
noun, plural fruits, (especially collectively) fruit.
1. any product of plant growth useful to humans or animals.
2. the developed ovary of a seed plant with its contents and accessory parts, as the pea pod, nut, tomato, or pineapple.
3. the edible part of a plant developed from a flower, with any accessory tissues, as the peach, mulberry, or banana.
4. the spores and accessory organs of ferns, mosses, fungi, algae, or lichen.
5. anything produced or accruing; product, result, or effect; return or profit:”
In Merriam Webster dictionary
“Fruit noun, often attributive
Definition of fruit
(Entry 1 of 2)
1a: a product of plant growth (such as grain, vegetables, or cotton) the fruits of the field)
b (1): the usually edible reproductive body of a seed plant
especially: one having a sweet pulp associated with the seed the fruit of the tree..”
Wet date is fruit. The term ‘fruit’ is not preceded by any adjective like “raw fruits” or “processed fruits” etc.
Therefore, all fruits, whether raw or processed or finished fruits are covered.
It covers fresh fruits as well as dry fruits. Whenever the Government wants to restrict the category to “raw” then it is so specifically mentioned like, in relation to “vegetable fibre” in above notification. Therefore, wet date, being fruit, it is covered by above notification and become exempt from GST.
Of course, the consequences of being exempt supply, will apply.
It also be noted that the invoice should specifically narrate about storage/warehouse charges for wet dates, to avoid any future ambiguity.
Therefore in my opinion the storage/warehousing charges for wet dates are exempt under above notification.