GST: When processes change 'Raw Green Peas' into 'Frozen Green Peas', the product's basic nature and character change. Therefore, it is not considered an agricultural product or vegetable. According to Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, services for storing processed frozen green peas are not exempt, and GST must be paid.
Authority for Advance Rulings, Uttarakhand Stellar Cold Chain Inc., In re RULING NO. 03/2023-24 AUGUST 22, 2023
Processed Frozen Green Peas:
- Storage Services: The applicant stores raw green peas bought from the market and sells them. They sought a ruling on whether storage charges for frozen green peas are taxable under the GST Act.
- GST Exemption: They asked if these charges fall under the NIL GST Tariff for storage of cereals, pulses, fruits, and vegetables according to Notification No. 04/2022-Central Tax (Rate), dated 13-7-2022.
Decision:
- Notification No. 12/2017: Exempts storage or warehousing of cereals, pulses, fruits, and vegetables.
- Agricultural Produce Definition: Items from plant cultivation with minimal processing that do not alter their essential characteristics are considered agricultural produce.
- Processing Changes Nature: The processes to turn raw green peas into frozen green peas change the product's basic nature and character.
- GST Applicability: Storage of processed frozen green peas is not exempt. GST must be paid for these storage services as the law only exempts storage of green peas in their raw form.
Relevant Notifications:
- Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017
- Notification No. 04/2022-Central Tax (Rate), dated 13-7-2022
