Cold storage facilities are essential for the preservation of perishable goods such as fruits, vegetables, and dairy products. The Indian Government has implemented the Goods and Services Tax (GST) to simplify the tax system and bring uniformity in the tax structure. In this article, we will discuss the Applicability of GST on Cold Storage.
Cold storage refers to the storage of perishable goods in a temperature-controlled environment. A cold storage facility is a warehouse facility equipped with refrigeration and temperature control systems designed to maintain a temperature range suitable for storing perishable goods.
Under the GST regime, cold storage facilities are considered to be a service and are subject to GST. The GST rate applicable to cold storage services is 18% on the gross amount charged for these services.
Businesses that use cold storage facilities for storing their goods can claim Input Tax Credit (ITC) on the GST paid on the cold storage services. The ITC can be claimed in the same manner as for other goods and services used in the course of business.
The GST Act provides an exemption from GST on the services provided by a cold storage warehouse operator for agricultural produce or goods, including dairy products, eggs, and other perishable items. This exemption does not apply to services provided for the storage of non-agricultural products.
The GST regime has brought in a significant change in the tax structure of India. Cold storage facilities are essential for the preservation of perishable goods, and under the GST regime, they are subject to GST. However, businesses that use cold storage facilities can claim Input Tax Credit (ITC) on the GST paid on the cold storage services. The GST Act also provides an exemption from GST on the services provided by a cold storage warehouse operator for agricultural produce or goods. Cold storage facilities are an essential part of the supply chain for perishable goods, and understanding the tax implications is necessary for businesses that use them.
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