Sale of plants
Querist : Anonymous
i have a query.
our company had given a portion of land to a customer for undertaking plantation activities of Eucalyptus. meanwhile, they have observed some standing subabul trees which has some commercial value. therefore, they have sold it off and gave the proceedings to us (sale value-cost incurred by them).
is VAT applicable to this transaction or Service Tax?
Please do reply as early as possible.
Thanks in advance.
Best Regards.
Querist : Anonymous
help me..
Service tax does not attract because no consideration for the service rendered by the customer.
For VAT clarification please let me know which state VAT applicable for this transaction.
Querist : Anonymous
Thanks for the information.
this transaction took place in HYderabad.
So please do reply.
Regards,
Vidya
I am not familiar with AP VAT I request other experts to answer the query
---
### 1. **VAT Applicability**
* Trees that are grown for commercial purposes (like timber or plants sold for commercial value) **may be treated as goods** under VAT.
* If the customer sold the trees and gave the proceeds to you (net of their costs), then **VAT could apply on the sale of those trees** because trees are considered movable goods.
* In Andhra Pradesh, **VAT would generally be applicable on sale of goods**, including timber and trees grown commercially.
* You should check if there’s any specific exemption for sale of plantation produce or timber under AP VAT, but generally, it’s taxable.
---
### 2. **Service Tax Applicability**
* Service Tax is charged on services rendered for consideration.
* Here, since the customer sold the trees on their own and handed over the proceeds to you, and you didn’t provide any service directly to the customer, **Service Tax would not apply**.
* There’s no direct service transaction between you and the customer in this case.
---
### Summary:
* **VAT is likely applicable on the sale of the trees (goods).**
* **Service Tax is not applicable** because no service is rendered to you by the customer in this context.
---
### Suggested Next Steps:
* Confirm the AP VAT Act provisions on plantation produce or timber sales.
* Ensure proper invoicing and VAT compliance for this sale.
* You may want to consult a local tax expert for state-specific clarifications.
If you want, I can help you draft a formal query or letter for VAT authorities or check more detailed provisions. Let me know!
Click here to login now
Similar Resolved Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Capital Gail Exemption Certificate
- Utilisation Fy 25-26 TDS challans in Fy 26-27 TDS Return
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Oct 2025 Invoices
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Issuing of delivery challan by seller of goods
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
