Is GST Levied on Renting out a Warehouse or Godown for Agricultural Produce?

GST (Goods and Services Tax) is a comprehensive tax levied on the supply of goods and services in India. It is a multi-stage, destination-based tax that is levied on every value addition in the supply chain. In this article, we will discuss whether GST is levied on renting out a warehouse or godown specifically for agricultural produce.

What is GST?

GST is a consumption-based tax that is levied on the value addition of goods and services at each stage of the supply chain. It is a single tax that replaces multiple taxes like Central Excise Duty, Service Tax, and Value Added Tax (VAT).

You can use rent software to help businesses manage rental billing, including generating rent invoices and rent receipts.

GST Rates for Rental Services

Rental services are classified under the Services Accounting Code (SAC) and are subject to GST at the applicable rate. The GST rates for rental services are as follows:

• Rental of Costumes & Apparels: 18%
• Rental of Props & Carnival Equipment: 18%
• Rental of Jewellery & Misc Accessories: 18%

For businesses with an Annual Aggregate Turnover (AATO) of ₹5 Crores or less, you can simply use the 4-digit code 9973 for all rentals below. If your turnover is above ₹5 Crores, use the precise 6-digit codes.

Levy of GST on Warehouse Rental

According to the GST law, the supply of a warehouse or godown for agricultural produce is considered a rental service and is subject to GST at the applicable rate. The supply of a warehouse or godown for agricultural produce is deemed to be a supply of a service.

Therefore, GST is levied on the rental income received from the supply of a warehouse or godown for agricultural produce.

For example, if a business rents out a warehouse to a farmer for storing agricultural produce, the business will be required to issue a rent invoice to the farmer, which will include the GST amount.

You can use recurring invoice software to generate recurring invoices for rent payments.

Conclusion

In conclusion, GST is levied on renting out a warehouse or godown for agricultural produce. The GST rate applicable to rental services is 18% under the SAC codes 997326, 997324, and 997329. Businesses must issue rent invoices to their tenants and pay GST on the rental income received.

For more information on GST and rental services, you can refer to the GST and billing code master sheet or consult with a chartered accountant.