Taxabiity of storage charges of rice.

This query is : Resolved 

12 July 2012 Whether warehousing charges/storage charges of rice and wheat are exempt from levy of service tax,considering the same as agriculture produce ?
Whwther the security services received from Home guard is under the net of service tax under Reverse mechanism ?


MANOHAR LAL
12.07.2012

12 July 2012 For first question, the answer is yes, it is in the negative list. For query no.2, it is no. It is not in the reverse charge mechanism.

13 July 2012 Please confirm whether wheat and rice are agriculture produce within the definition of service tax.


13 July 2012 Rice and wheat are very important commodity of agricultural produce. The relevant definition in clause (5) of section 65B says "any produce resulting from cultivation or rearing of plants......by the cultivator or producer". They will not name the products and only we have to interpret.

14 July 2012 With due regard to Mr. Rengaraj, I dont agree with his view that security services are not under reverse charge basis because now with the introduction of taxation based on negative list,first of all there is not category of reverse charge. secondly, one has to see definition of "supply of manpower” means supply of manpower, temporarily or otherwise, to another person to work under his superintendence or control.Therefore, in my view, security services comes within the meaning of supply of manpower and on supply of manpower reverse charge is applicable as per Notification No. 30/2012-ST.

20 August 2012 I have consulted some experts,they are of the view that rice is under the net of service tax.Because production is of paddy not of rice,Paddy becomes rice after the husk is removed with a process which usually not done by cultivator and not done at farm.

Please examine the status of rice in light of above facts.



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