GST on Storgae Services
This query is : Open
27 July 2024
Case1:
One of our client is providing storage services where they specifically charges storage charges on basis of per container or weight of cargo to his clients on monthly or daily basis. So please clarify whether they have to charge IGST (in case service provider and service recipient registered in different state) or they have to charge CGST & SGST. Since storage facility provided without earmarked of nominated place/ area and does not grant right to use immovable property. Also please clarify the SAC in which invoice to be raised.
Case2:
They are also providing fixed space in warehouse to client and charges on basis of sq ft/sq mtr on monthly or daily basis so please clarify whether they can charge IGST (in case service provider and service recipient registered in different states) or they have to charge CGST & SGST. Also please clarify the SAC in which invoice to be raised.
One of our client is providing storage services where they specifically charges storage charges on basis of per container or weight of cargo to his clients on monthly or daily basis. So please clarify whether they have to charge IGST (in case service provider and service recipient registered in different state) or they have to charge CGST & SGST. Since storage facility provided without earmarked of nominated place/ area and does not grant right to use immovable property. Also please clarify the SAC in which invoice to be raised.
Case2:
They are also providing fixed space in warehouse to client and charges on basis of sq ft/sq mtr on monthly or daily basis so please clarify whether they can charge IGST (in case service provider and service recipient registered in different states) or they have to charge CGST & SGST. Also please clarify the SAC in which invoice to be raised.
27 July 2024
Type of Supply:
Since the storage service does not grant the right to use immovable property and there is no earmarked or nominated place/area, it is considered a supply of service rather than a lease or rental of immovable property.
Place of Supply:
According to the GST provisions, the place of supply of services for immovable property is where the property is located. However, since the storage service is not granting a right to use the immovable property, it falls under general supply of services.
For services other than those related to immovable property, the place of supply is determined based on the location of the service provider and the recipient.
Inter-State vs. Intra-State:
If the service provider and the service recipient are registered in different states, it is considered an inter-state supply and IGST is applicable.
If the service provider and the service recipient are registered in the same state, it is considered an intra-state supply and CGST and SGST are applicable.
SAC (Service Accounting Code)
The service of storage of goods can be classified under the following SAC:
SAC Code: 997213 - Storage and Warehousing Services
This code includes storage and warehousing services, which involve the operation of storage facilities for all kinds of goods, including perishable, refrigerated, bulk, etc., whether in general or a specified storage facility.
Invoice Details
Invoice for Inter-State Supply: Charge IGST.
Invoice for Intra-State Supply: Charge CGST and SGST.
Since the storage service does not grant the right to use immovable property and there is no earmarked or nominated place/area, it is considered a supply of service rather than a lease or rental of immovable property.
Place of Supply:
According to the GST provisions, the place of supply of services for immovable property is where the property is located. However, since the storage service is not granting a right to use the immovable property, it falls under general supply of services.
For services other than those related to immovable property, the place of supply is determined based on the location of the service provider and the recipient.
Inter-State vs. Intra-State:
If the service provider and the service recipient are registered in different states, it is considered an inter-state supply and IGST is applicable.
If the service provider and the service recipient are registered in the same state, it is considered an intra-state supply and CGST and SGST are applicable.
SAC (Service Accounting Code)
The service of storage of goods can be classified under the following SAC:
SAC Code: 997213 - Storage and Warehousing Services
This code includes storage and warehousing services, which involve the operation of storage facilities for all kinds of goods, including perishable, refrigerated, bulk, etc., whether in general or a specified storage facility.
Invoice Details
Invoice for Inter-State Supply: Charge IGST.
Invoice for Intra-State Supply: Charge CGST and SGST.
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27 July 2024
Thanks for above reply also please clarify on Case2 with your valuable comments and if any case law available on same refer me.
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