GST Exemption for Renting Godowns to Store Paddy
The Tamil Nadu Authority for Advance Ruling confirmed that renting a godown specifically for storing paddy is exempt from GST.
- Ruling
- Advance Ruling No.47/AAR/2025, dated 17.11.2025
- Dated
- 17 Nov 2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Leena Modern Rice Mill asked if paddy storage rent is taxable.
- The Authority ruled the service is exempt from GST.
- Paddy is officially classified as agricultural produce.
- Storage of agricultural produce qualifies for a nil tax rate.
In short
The company asked the Tamil Nadu Authority for Advance Ruling (AAR) if they must pay Goods and Services Tax (GST) on rent collected from a tenant using their godown to store paddy. The authority decided that because paddy is agricultural produce, the service of storing it is exempt from tax.
What has changed
How it worked before
It was previously unclear to many business owners whether renting out a private godown for agricultural storage qualified for the same tax exemptions as professional warehousing services.
What has changed
The authority confirmed that paddy is agricultural produce under the current tax notifications. This means landlords renting space specifically for paddy storage do not need to charge GST on that rent.
Who this affects
Landlords and warehouse owners who rent out space specifically for the storage of paddy or other agricultural produce.
An example
A warehouse owner in Tamil Nadu rents a facility to a farmer to store harvested paddy. The owner wonders if they should add 18% GST to the monthly rent invoice. Based on this ruling, the owner can reasonably argue that the service is exempt because the space is used exclusively for agricultural produce.
What you should do
If you rent out space for paddy storage, you may be eligible for this exemption. However, remember that an Advance Ruling only binds the specific business that asked for it and their local tax office. You should consult with your tax advisor to see if your specific rental agreement qualifies before stopping your GST collections.
If you do nothing
If you stop charging GST without confirming your specific situation qualifies, you risk a tax demand notice later. If a tax officer disagrees with your interpretation, you will be liable for the unpaid tax, interest, and potential penalties. Never assume a ruling for another business automatically protects your own tax filings.
The terms explained
- Agricultural produce
- Any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fiber, fuel, raw material or other similar products.
- Advance Ruling
- A written decision provided by tax authorities to a business regarding how tax laws apply to their specific transaction.
- Exempt
- A status where a specific supply of goods or services is not subject to GST, meaning no tax is collected or paid.
The ruling in detail
Authority for Advance Ruling
M/s. LENA MODERN RICE MILL
Advance Ruling No.47/AAR/2025, dated 17.11.2025 · Tamil Nadu
Questions before the authority
- Paddy Godown Rent - Taxable or Not
Facts
The applicant is the owner of premises that include a rice mill and a godown. They have rented out the godown to a tenant specifically for the storage of paddy. The applicant sought a ruling on whether the rent received for this godown is subject to GST.
Ruling
| Question | What the authority ruled |
|---|---|
| Taxability of rent for paddy godown | Not taxable under GST As per S.No.54 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 |
The Authority ruled that the rent received by the applicant for the godown used for the storage of paddy is not taxable under GST. This is because the service of storage or warehousing of agricultural produce is exempt from tax under the relevant notification. The ruling confirms that paddy qualifies as agricultural produce for this purpose.
Reasoning
The Authority relied on S.No.54 of Notification No.12/2017-Central Tax (Rate), which provides a **Nil rate of GST** for services relating to the storage or warehousing of agricultural produce. It determined that paddy, being an unprocessed grain harvested from the rice plant, falls under the definition of **agricultural produce**. Since the godown is used for storing paddy, the rental service qualifies for the exemption. The ruling concluded that the necessary criteria for the agricultural produce exemption are satisfied.
Provisions relied on
- Section 97(2)(b) of the CGST/TNGST Act, 2017
- S.No.24 of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017
- S.No.54 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017
For the practitioner
This ruling provides clarity for landlords renting out storage facilities specifically for paddy, confirming that such rental income is **exempt from GST**. It reinforces the classification of paddy as agricultural produce. Practitioners should note that this exemption is specific to the storage of agricultural produce and does not extend to general commercial warehousing.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/3-ms-leena_modern.pdf
Legibility of the scan, as read: high.
Prepared 15-10-2026.
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