26 December 2013
we have given our godown for lease to a company which stores corn as raw materials for its further processing.do we have to pay service tax on it or is it exempt under negative list under sec 66d as it is for agricultural produce . does it alter essential characteristics of produce?
26 December 2013
Section 66D (d)(v) which specifies an item in the negative list reads as follows - " services relating to agriculture by way of loading, unloading, packing, storage or warehousing of agricultural produce ". Agricultural produce defined as any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market.
Apparently the godown is being used for the storage of the produce i.e corn and it is in marketable state for the primary market and hence an agricultural produce. It would not attract service tax.
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