Rent Paid for Hired Godowns Used Exclusively for Exempt Agricultural Warehousing Is Still Taxable at 18% GST — Two Separate Supplies Cannot Be Read in Tandem: Gujarat AAR

The Gujarat Authority for Advance Ruling has held that GST at 18% is applicable on rent paid by a State warehousing corporation for godowns hired from registered and unregistered persons, even though the hired godowns are used exclusively for storage and warehousing of raw agricultural produce which is itself exempt under Entry 54(e) of Notification No. 12/2017-CT (Rate). The ruling by Members Sushma Vora and Vishal Malani in GUJ/GAAR/R/2026/35 (M/s Gujarat State Warehousing Corporation, decided 21.09.2026) holds that hiring of godowns and providing agricultural warehousing services constitute two separate supplies that must be examined independently with reference to the notifications applicable to each, and cannot be read in tandem.

The AAR classified the hiring of godowns under SAC 997212 (Rental or leasing services involving own or leased non-residential property) under Entry 16(iii) of Notification No. 11/2017-CT (Rate) at 18%. Following the insertion of Entry 5AB in Notification No. 13/2017-CT (Rate) by Notification No. 09/2024-CT (Rate) effective 10.10.2024, GST on rent paid to unregistered persons is payable by the applicant under the reverse charge mechanism. The contention that the input service should inherit the exempt character of the output service was rejected as untenable.

- 2026-juristway.com-2625-AAR(Gujarat)-GST  |  AAR Gujarat  |  GUJ/GAAR/R/2026/35  |  21.09.2026