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MILK CHILLING UNIT

B Vinay Reddy (Hyderabad ) (7842 Points)

24 March 2018

Whether Milk Chilling units are liable for GST?

The Business is
Collecting milk from local farmers say 10ltrs, 5ltrs... and brought to shop and stored at 5 c i.e., chilling inorder to preserve the milk and sold to Diary like Vijaya Diary, Jersey milk etc.,

*Collecting milk- Chilling- selling milk to Diaries*

Whether this activity of CHLLING OF MILK is liable for GST?

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177713 Points)
Replied 24 March 2018

" Whether this activity of CHILLING OF MILK is liable for GST?"

Yes at 18%...... (but on additional cost)

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B Vinay Reddy (Hyderabad ) (7842 Points)
Replied 24 March 2018

Thanks for your reply sir!!

But pls can you clarify on this:

As per *Sec 66D of Finance Act,1994* “agricultural produce” means any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market;

In service Tax regime Loading, Unloading, Packing, *Storage* or warehousing of Agriculture Produce is *Exempt* under service tax by way of *Sec 66D of Finance Act,1994*

The same exemption was carried forward to GST regime under *Annexure II* of Chapter III and treated as *Exempted Service*

B Vinay Reddy (Hyderabad ) (7842 Points)
Replied 24 March 2018

You may refer below provisions under GST

As per Sl. No. 25 of Notification No. 2/2017-Central Tax (Rate) dated 28.6.2017 as amended " Fresh milk and pasteurised milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk is exempted from gst..

As per Sl. No. 7 of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 as amended Ultra High Temperature (UHT) milk falling under Tariff item 0401 will attract gst @ 5%.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177713 Points)
Replied 24 March 2018

Under service tax regime, chilling of milk was catagorized as job work as 'manufacure & procesing of milk'.......... and was specifically exempted by way of notification.

Under GST, without any such specific exemption, it is still open for litigation, and hence advisable to pay 18% GST over such chilling charges....

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