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Guide · GST Rates

GST on Cold Storage in India — Exempt or 18%?

When cold storage, warehousing and cold-chain services are exempt for agricultural produce, when processed and non-agricultural goods attract 18%, and how ITC works for cold storage operators.

Written by
TaxClue Editorial Desk
Updated
18 August 2026
Reading time
5 min
Questions
15 answered
  • Updated for FY 2026-27
  • GST Expert Reviewed
  • Cold Chain & Warehousing
Quick Answer

Cold storage, warehousing and loading-unloading of agricultural produce is fully exempt under Notification 12/2017-CT(R). Cold storage of processed, branded or non-agricultural goods — processed foods, ice-cream, dairy beyond primary stage, pharmaceuticals — is taxable at 18%. Renting the cold-storage building as immovable property is also 18%. GST 2.0 (22 Sep 2025) did not change this.

At a glance

GST on Cold Storage — Decision Table

The GST treatment turns on whether the goods stored are "agricultural produce". Below is every common cold-storage and warehousing scenario, with ITC eligibility.

Service / Goods StoredGSTITCNotes
Cold storage — agricultural produceExemptN/ANo GST charged (Notif. 12/2017)
Warehousing — agricultural produceExemptN/ASame exemption as cold storage
Cold storage — processed / branded food18%YesSAC 996729 / 998619
Cold storage — ice-cream, frozen dessert18%YesManufactured product
Cold storage — dairy beyond primary18%YesProcessed dairy (not raw milk)
Cold storage — pharmaceuticals / vaccines18%YesNot agricultural produce
Cold storage — chemicals / other goods18%YesSAC 996729
Renting the cold-storage building18%YesRenting of immovable property

Cold-storage/warehousing treatment was retained under the GST 2.0 two-slab structure effective 22 September 2025. Confirm the item's classification on gst.gov.in before invoicing.

The core question

Exempt or 18% — What Decides It?

One test decides the GST on a cold-storage service: are the goods "agricultural produce"? Store raw farm produce and it is exempt; store anything processed, branded or non-agricultural and the service is taxable at 18%.

Exempt

Agricultural produce — no GST

  • Fruits, vegetables, grains, cereals, pulses
  • Raw spices, cotton (ginned/baled), copra
  • Raw milk and primary farm produce
  • Storage, warehousing & loading-unloading
  • Notification 12/2017-CT(R)
18%

Processed / non-agricultural — with ITC

  • Processed & branded packaged foods
  • Ice-cream, frozen desserts, dairy beyond primary
  • Pharmaceuticals, vaccines, chemicals
  • Renting the cold-storage building
  • SAC 996729 / 998619 · ITC available
The exemption is lost the moment produce is processed

"Agricultural produce" means produce on which no further processing is done — or only processing (cleaning, grading, sorting, packing) usually done by a cultivator that does not change its essential characteristics. Once an item is manufactured, branded or processed beyond the primary stage (e.g. raw milk → ice-cream, fresh fish → processed seafood), it stops being agricultural produce and its cold storage becomes taxable at 18%.

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The exemption boundary

What Counts as "Agricultural Produce"?

The exemption covers storage of produce on which no processing — or only primary processing done by the cultivator that does not alter its essential character — has been carried out. This table shows how common items fall on either side of the line.

Item StoredCold Storage GSTWhy
Fresh fruits & vegetablesExemptPrimary sorting/grading allowed
Grains, cereals, pulses (rice, wheat)ExemptAgricultural produce
Raw spices, unprocessedExemptNo further processing
Cotton — ginned / baledExemptNamed in the notification
Raw / fresh milkExemptPrimary produce
Fresh seafood (unprocessed)ExemptIf not further processed
Ice-cream, frozen desserts18%Manufactured product
Processed / branded packaged food18%Processing changes character
Frozen / processed seafood18%Processed beyond primary stage
Pharmaceuticals18%Manufactured, not agricultural

Borderline items (dairy, seafood) turn on the degree of processing — get a classification opinion where value is significant.

Taxable side

Cold Storage of Processed & Non-Agricultural Goods — 18%

Where goods are not agricultural produce, cold storage is a taxable supply of service at 18% (SAC 996729 / 998619). The operator raises a GST invoice (9% CGST + 9% SGST intra-state, or 18% IGST inter-state) and the business storing the goods can claim Input Tax Credit where used for its taxable business.

  • Processed and branded foods, ready-to-cook and frozen meals — 18%.
  • Ice-cream, frozen desserts and dairy beyond the primary stage — 18%, as manufactured products.
  • Pharmaceuticals, vaccines and temperature-sensitive drugs — 18%.
  • Renting the cold-storage building as immovable property is 18% — distinct from the storage service itself.
TaxClue Insight

A single cold-storage facility can carry both treatments at once — exempt for a batch of potatoes and taxable for a batch of ice-cream. Operators must classify each contract correctly and, where they supply both, run proportionate ITC reversal on common inputs (electricity, refrigerants, maintenance) under Rule 42/43.

Storing processed goods or running a mixed facility? Get your invoicing & ITC set up right.

Talk to a GST Expert →
Operator side

ITC & Registration for Cold Storage Operators

An operator supplying only exempt agricultural-produce storage cannot claim ITC and bears input GST (electricity, refrigerants, maintenance) as a cost. An operator with taxable supplies can claim ITC; a mixed operator must reverse the ITC attributable to exempt storage under Rule 42/43.

Operator profileITC?Reason
Only agri-produce (exempt) storageNoWholly exempt supply — input GST is a cost
Only taxable (non-agri) storageYesNormal ITC on common inputs
Mixed exempt + taxable storagePartialProportionate reversal — Rule 42/43
Client storing taxable goodsYesClaims 18% GST paid as ITC

Registration is mandatory once aggregate turnover crosses ₹20 lakh (₹10 lakh in special-category states); an operator making only exempt supplies may stay outside GST.

Businesses storing taxable goods — pharma, food processors, beverage makers — can credit the 18% cold-storage GST against their output liability, subject to normal ITC conditions.

Sources
  1. Rates & notifications: gst.gov.in
  2. CBIC rate finder: cbic-gst.gov.in
  3. Agri-produce exemption: Notification 12/2017-CT(R) (28 Jun 2017)
  4. ITC reversal on exempt supplies: Rule 42 & 43, CGST Rules 2017

Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.

People also ask

Questions, answered

Short, direct answers to the 15 questions readers ask most on this topic.

It depends on what is stored. Cold storage, warehousing and loading-unloading of agricultural produce is fully exempt from GST under Notification 12/2017-Central Tax (Rate). Cold storage of processed, branded or non-agricultural goods — such as processed foods, ice-cream, dairy beyond the primary stage and pharmaceuticals — is taxable at 18%. So there is no single answer: the treatment turns entirely on the nature of the goods stored.

For agricultural produce the rate is nil (exempt). For processed, branded and non-agricultural goods the rate is 18% (SAC 996729 / 998619). Renting the cold-storage building itself as immovable property is also 18%. These rates were retained under the GST 2.0 reform effective 22 September 2025.

No. The GST 2.0 rationalisation (effective 22 September 2025) restructured many goods and services rates into a two-slab system but did not change the treatment of cold storage or warehousing. Agricultural-produce storage remains exempt, and processed/non-agricultural storage remains at 18%.

Yes. Storage or warehousing of agricultural produce is fully exempt under Notification 12/2017-CT(Rate). This covers fruits, vegetables, grains, cereals, pulses, raw spices, ginned/baled cotton, copra and similar farm produce. The exemption applies to the storage service — no GST is charged to the depositor.

Agricultural produce means any produce of agriculture on which no further processing has been done, or only such processing (cleaning, grading, sorting, drying, packing) as is usually done by a cultivator or producer and which does not alter the essential characteristics of the produce. Raw fruits, vegetables, grains, pulses and unprocessed spices qualify; manufactured, branded or heavily processed items do not.

Yes. Fresh fruits and vegetables are agricultural produce, so their cold storage is exempt from GST. Primary handling such as sorting and grading does not affect the exemption. Once the produce is processed into a manufactured product, however, the exemption is lost and storage becomes taxable at 18%.

Raw, fresh milk is treated as agricultural produce, so its cold storage is exempt. Dairy processed beyond the primary stage — for example ice-cream, flavoured or manufactured dairy products — is not agricultural produce, and its cold storage is taxable at 18%. The dividing line is the degree of processing.

18%. Processed and branded food products are not agricultural produce, so their cold storage is a taxable supply of service at 18% (SAC 996729 / 998619). The operator charges 18% GST on the invoice and the business storing the goods can claim it as Input Tax Credit if used for its taxable business.

Yes, at 18%. Ice-cream is a manufactured product, not agricultural produce, so its cold storage does not qualify for the exemption and is taxable at 18%.

18%. Pharmaceuticals, vaccines and other temperature-sensitive medicines are manufactured goods, not agricultural produce, so their cold storage is taxable at 18%. Pharma companies storing such goods can generally claim ITC on the GST paid.

Yes. Renting the cold-storage building or godown as immovable property is a taxable supply at 18%, separate from the exemption for storing agricultural produce. The exemption attaches to the storage service for agricultural produce, not to letting out the premises.

It depends on their supplies. An operator providing only exempt agricultural-produce storage cannot claim ITC and bears input GST (electricity, refrigerants, maintenance) as a cost. An operator with taxable supplies can claim ITC, and a mixed operator must reverse the ITC attributable to exempt storage under Rule 42/43 of the CGST Rules.

Yes, where the 18% GST is charged. A business storing taxable goods — a pharma company, food processor or beverage maker — can claim the 18% cold-storage GST as Input Tax Credit against its output tax, subject to normal ITC conditions. No ITC arises on exempt agri-produce storage because no GST is charged.

Registration is mandatory once aggregate turnover crosses ₹20 lakh a year (₹10 lakh in special-category states). An operator making only exempt agricultural-produce storage supplies may remain outside GST, while one providing taxable storage must register on crossing the threshold (or earlier for inter-state supply).

Taxable storage and warehousing services are classified under SAC 996729 (other storage and warehousing) — sometimes 998619 for related support services — at 18%. Storage of agricultural produce, though falling under the same broad heading, is specifically exempted by Notification 12/2017-CT(Rate).