Business Auxiliary Services

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 December 2009 Dear Freinds,
I have a query on Clause iv of B.A.S. namely procurement of goods or services, which are inputs for the client, intended for use by the client

My client ABC purchae wheat and other grain from the Farmers or other Marketing societies and Selling it to XYZ Co. by charging Sales Tax on the whole of selling price ( Purchase price+ gunny bags cost+ incidental charges).

Now the Service Tax Deptt. says my client have to pay Service Tax on the inciendal charges included in the sale bill.

My question is whether my client covered under above clasue as it is makeing sale/purchase on his own. not on any behalf.
service tax will be applicable if any under which head.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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11 December 2009 There shouldbe no liability. Ask the dept under which head the same should be paid. As on date all services are not taxable only those which are defined.

Querist : Anonymous

Querist : Anonymous (Querist)

11 December 2009 Dear Sir,

Department has charged the our activity under "clause iv" of the B.A.S. u/s 65(19)of the Finance Act 1994 namely procurement of goods or services, which are inputs for the client, intended for use by the client

SANJAY JAIN

SANJAY JAIN (Expert)
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12 December 2009 In the present circumstances, the demand of service tax department is not sustainable as the transaction is one to one on the basis of sale, then there is no question for levy service tax. As service tax and sales tax are in nature to exclude one to another and simultaneously can not be levied.

Secondly to the worst if the service tax department does not ready to bend, then refer the exemption Notification No. 13/2003-ST dated 20.06.2003 as amended by Notification No. 8/2004-ST dated 09.07.2004 which clearly exempts agriculture products agents from service tax.

Further if service tax department is trying to levy tax under entry 65(19)(iv), please refer the exemption Notification no. 14/2004-ST dated 10.09.2004.

Anyway fundamentally there is no intention to impose tax on agriculture activities in India.

For further query, feel free to write sanjayinfbd@yahoo.com (M-09350048731)

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