Applicability of service Tax on Agricommodity Company

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This query is : Resolved

Bhavesh (Querist)

03 May 2016 My client company is dealing in import & export business & processing of pulses. They are paying clearing & forwarding expenses to CHA AGENT. CHA is claiming as reimbursement expense which is paid by him. supporting bills contain charges toward Terminal Handling or clearing charges etc. ( at the time of import of commodities - these charges are paid to port or other agency by CHA) NOW My query is that : on above all expenses third party is charging the service tax. 1) whether service tax is applicable or not on above as company in agri business? 2) Some supervision is done by the third party for checking the imported commodities. Here also they are charging the service tax on above. Whether ST is applicable or not? 3) client is paying towards fumigation charges for the commodity stored at warehouses. Third is charging the service tax. whether service tax is applicable or not? 4) CHA is paying to KOLKATA PORT TRUST towards Rental charges for space/shed taken from the port. while port is charging the service tax on the space allocated. Here also service tax is applicable or not?? Note: consider above nature of business for all cases. Your valuable clarification is highly appreciated and useful to us for saving the client money towards service tax is not applicable. Request: Answer all your suggestion on above cases point wise. let us know if u need any further information or clarity. Thanks in advance for your cooperation.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 May 2016 1 Service tax is applicable on the company in agricultural business.
2 Service tax applicable on import inspection.
3 Imported commodity service tax applicable on fumigation.
4 Here also service tax applicable.
Agriculture business is not exempted from service tax. Agricultural production, storage and transport is exempted from service tax.

Bhavesh

Bhavesh (Querist)

16 May 2016 Thank you very much sir for your reply. I agree with all your suggestion.
But my question is that as per ST negative list or Mega exemption notification exempt agriculture produce or foodgrains(pulses and rice).
1.Suppose the company is taking warehouse on rent for storage of Agri commodity then the service provider will not charge service tax as per negative list.
2. Same here Good Transport Agency service : If the company is using transport service for Agri commodity then Reverse charge will not applicable to the company.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

16 May 2016 I fully agree with you if you are buying the produce from the agriculturists in India.

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