GST on Cold Storage in West Bengal: Potato Storage Exemption, Processed Goods at 18%, Licences and Income Tax
Storage and warehousing of agricultural produce is exempt from GST, so a West Bengal cold storage that stores potatoes, onions, fruits and vegetables for farmers and traders charges no GST on its rent. Loading, unloading, packing and grading of agricultural produce are also exempt. Storage of processed goods such as frozen foods, potato chips, dairy products or medicines is taxable at 18%. Since West Bengal is one of India’s largest potato producers, most cold storages in Hooghly, Bardhaman, Paschim Medinipur and Bankura are mainly exempt suppliers, which affects their GST registration and input tax credit.
GST on cold storage services
| Service | GST |
|---|---|
| Storage or warehousing of potatoes, vegetables, fruits and other agricultural produce | Exempt |
| Loading, unloading, packing, storage of agricultural produce | Exempt |
| Storage of processed or frozen foods, chips, dairy, ice cream | 18% |
| Storage of medicines and pharmaceuticals | 18% |
| Renting the whole cold storage building to another operator | 18% (renting of immovable property) |
| Sale of potatoes by a trader | Exempt (fresh vegetables) |
What counts as agricultural produce?
Produce from cultivation of plants and rearing of animals (except horses) for food, fibre, fuel or raw material, with no processing, or only the processing usually done by a cultivator that does not change its essential character (cleaning, drying, sorting, grading). Potatoes kept in cold storage remain agricultural produce. Potato flakes or chips do not.
Do cold storages need GST registration?
A cold storage supplying only exempt services does not need to register. If it also stores taxable goods or rents space for processed food, and the taxable turnover crosses ₹20 lakh, it must register and charge 18% on those services. Input tax credit is then allowed only in proportion to taxable supplies, so keep separate records of space used for exempt and taxable storage.
Other compliance
- Cold storage licence under the West Bengal cold storage law from the state’s agricultural marketing authorities, with renewals and capacity limits.
- Electricity is the biggest cost; check eligibility for any state power concession for agro-processing in the new West Bengal Industrial Policy 2026.
- Storage receipts for potato bonds, which traders and banks rely on for credit.
Income tax
Rent from storing agricultural produce is business income, not agricultural income, so it is taxable. Depreciation on plant and machinery, interest on loans and electricity are deductible. Many cold storages are partnership firms or companies with seasonal cash flows; keep proper books and avoid large cash receipts.
FAQs
Is GST charged on potato cold storage rent?
No. Storage of agricultural produce, including potatoes, is exempt.
Is GST charged on storing frozen food?
Yes, at 18%, because frozen food is a processed product.
Does a potato cold storage need GST registration?
Not if it provides only exempt storage. It must register if taxable services cross ₹20 lakh.
TAXAJ handles GST, accounts and income tax for cold storages and agri-businesses in West Bengal. See our cold chain business service or talk to our Kolkata team.
Last updated 11 November 2026. Sources: Notification 12/2017-Central Tax (Rate), entries 54 and 2(d) (definition of agricultural produce); Notification 11/2017-Central Tax (Rate); CGST Rules, rule 42. General information only.
