GST Vidhi | GST Articles

Warehousing is an act of storing agricultural produce or processed goods in a warehouse for the purpose of distribution, sale, or manufacturing. Warehouses are used for storing goods for an extended period of time and are typically equipped with storage areas, loading docks, conveyors, and other material-handling equipment. Warehousing also involves the movement and storage of inventory in and out of the warehouse, as well as the tracking of goods and inventory

Scheme of levy GST on Storage and Warehousing Services

The Central Government has issued Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 specifying the services which are exempt from levy of GST. Intra-state supply of storage and warehousing services that are specified under the said Notifications, are not chargeable to tax. The storage and warehousing services which are otherwise not exempted would be chargeable to tax under the GST regime.

Classification of Storage and Warehousing Services:

As per ANNEXURE appended to Notification No. 11/2017-Central Tax (Rate), dated 28.06.2017, the scheme of classification in respect of storage and warehousing services is as under:

Time of supply of storage and warehousing service:

According to section 13(1) of the Act, the liability to pay tax on serices shall arise at the time of supply, as determined in terms of the provisions of section 13. As per sub-section (2) of section 13 of the Act, the time of supply of services shall be the earliest of the following dates, namely:

a)     The date of issue of invoice by the supplier, if the invoice is issued within the prescribed period: or

b)    The date of provision of service, if the invoice is not issued within the prescribed period or the date of receipt of payment, whichever is earlier; or

c)     The date on which the recipient shows the receipt of service in his books of account, in a case where the provisions under clause (a) or clause (b) do not apply.

Place of Supply of storage and warehousing service:

Under the GST regime, all intra state supplies of goods and services or both are chargeable to Central Goods and Services Tax (CGST) and all inter-State Supplies of goods and services or both are chargeable to Integrated Goods and Services Tax (IGST). For the purpose of determining as to whether any supply of goods or services or both is an intra-state supply or an inter-state supply, the place of supply of goods or services is required to be determined.

The provisions relating to determination of place of supply of services are enshrined under section 12 of the Integrated Goods and Services Tax Act, 2017. Since Storage and warehousing services are directly related to an immovable property, the place of supply of such services shall be determined as per clause (a) of sub-section (3) of section 12, according which the place of supply of such service shall be the location at which the immovable property is located or intended to be located.

If the location of the immovable property is located or intended to be located outside India, the place of supply shall be the location of the recipient.

Where the immovable property is located in more than on state or union territory, the supply of services shall be treated as made in each of the respective states or union territories, in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed.

Input Tax credit to recipient of storage and warehousing service

Storage and warehousing services does not fall under the negative list of services which are ineligible for taking input tax credit under sub-section (5) of section 17 hence, tax paid on inward supply of such service would be allowable as input tax credit against discharge of tax payable on outward supply of taxable goods or services or both.

 Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.