'Burden' for collateral management cos working on rented warehouse model

The government has brought warehouses under Goods and Service Tax net from April. However, those players in organised sector who take warehouses on rent as part of their collateral management business, see a huge burden especially when they deal in agri commodities.

Agri commodities collateral management business has flourished in last few years as these companies help farmers and processors to get finance from banks and non-banking institutions. They have to pay now 18 per cent GST on rent they pay for warehouses in which they keep collateral commodities. In many cases they themselves finance farmers or their group NBFCs finance