Whether storage or warehousing of cotton in baled or ginned form is covered under entry 24B of Notification No. 12/2017-Central Tax (Rate) which exempted services by way of storage and warehousing of raw vegetable fibres such as cotton before 18.07.2022.
Representations have been received regarding applicability of GST exemption on the service of storage or warehousing of cotton in baled or ginned form.
Prior to 18.07.2022, entry 24 B of Notification No. 12/2017-Central Tax (Rate)
dated 28.06.2017 exempted services by way of storage and warehousing of, inter
alia, raw vegetable fibers such as cotton, flax, jute etc. Cotton Fiber
glossary by barnhardtcotton.net defines ‘cotton staple, virgin cotton or raw
cotton’ as cotton fibers that are removed from the cotton seed by the gin.
Further, CESTAT Chandigarh in the case of R.K.& Sons vs CCE, Rohtak dated
14th July 2016 has observed as under:
“Cotton (with seeds) as plucked from cotton plants can hardly be called
cotton fibre in which case cotton fibre would come into existence only after
the seeds are ginned away from cotton plucked from cotton plants. Cotton
fibre obtained by ginning cotton plucked cotton plants is nothing but raw
cotton fibre because there cannot be rawer form of cotton fibre obtained
from cotton-with-seeds plucked from cotton plants.”
Accordingly, it is clarified that service by way of storage or warehousing
of cotton in ginned and or baled form was covered under entry 24B of
notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 in the
category of raw vegetable fibres such as cotton. It may however be noted
that this exemption has been withdrawn w.e.f 18.07.2022
source: GST circular 177-08-2022 dated 03-08-2022
#gst #gstcircular #gstupdates #icecream #itc #warehousing #storage #exemptservices
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